BTL landlords turn to property investment platforms

ONE THIRD of British landlords will use property debt investment platforms more as the buy-to-let (BTL) market becomes less attractive, new research has found.

According to a survey from secured property lender Fitzrovia Finance, more than half (54 per cent) of the UK’s BTL landlords say they have been affected by tougher tax treatments and tighter bank lending criteria.

As a result, one in five said that they had reduced the number of BTL properties in their portfolios, while 15 per cent said that market conditions have deterred them from buying more properties.

Read more: Gross mortgage lending dips amid Brexit uncertainty

Among those who have sold a BTL property, eight per cent said that they used their proceeds to invest via property debt investment platforms, including peer-to-peer property lenders. One in three landlords said that as the BTL market has become less attractive, they will increasingly use property debt investment platforms.

“Property debt investment platforms are a good alternative for landlords who understand the asset class and the risks involved,” said Brad Bauman, chief executive of Fitzrovia Finance.

Read more: Landbay: Tenants aren’t interested in buying a home

“As the BTL market becomes less attractive, our research suggests that many may increasingly turn to property debt investment platforms for attractive risk adjusted returns but without the hassle of managing tenants or carrying out costly maintenance.”

When asked which features would motivate them to start investing through property investment platforms, 33 per cent of landlords said that they would look for attractive secured property lending opportunities.

Significantly, 29 per cent said that they wanted to see new regulation that will make the sector more transparent and safer. A further 28 per cent said trust in the company’s management team and track record was important, while 26 per cent said that they would look for attractive risk-adjusted returns.

Read more: Buy-to-let battle hots up as LendInvest cuts rates