Property investors ‘building war chests’ to expand portfolios

1 July 2020 | Investment

Property investors 'building war chests' to expand portfolios

The nation’s property investors are increasingly looking to grow their cash reserves and expand their portfolios, according to Mortgages for Business.

The specialist buy-to-let (BTL) broker reports that 30% of investors are taking out a remortgage with the aim of building a ‘war chest’ to purchase further properties.

Some 46% of professional landlords surveyed said they are increasing the size of their loans, which is significantly higher than the long-term average of 38%.

According to the research, building up funds to bag a ‘bargain’ is the number one priority for active investors.

This time last year, remortgaging investors were more focused on managing risk, the broker says, keen to move on to long fixed-rate mortgages and away from variable rate products.

This management of risk has now moved down to the third most important concern for landlords looking to remortgage. The second most popular concern for investors is managing cashflow by securing lower monthly payments through remortgaging.

Mortgages for Business previously suggested that landlords would be looking to ‘hoover up’ cheap properties as a result of the Covid-19 pandemic.

And now its managing director, Steve Olejnik, says with average property prices expected to drop before the end of 2020, the ‘balance between risk and reward is shifting’.

“It will be interesting to see how landlords’ investment strategies adjust to changing tenant demand,” he says.

This post has originally been featured in Property Investor Today.