Young Index of Buy to Let Investor Sentiment full of Non-Surprises

Faith continues to increase in the UK housing market as prices continue to rise, all the while the recurring correction gets closer and closer.

Today the Young index released the findings of its survey of UK landlords. The general message is that they are more confident about the market than they were in the last quarter and this time last year, which is hardly surprising.

It is also not surprising that 99% of investors intend to hold their assets for at least 12 months; at present it is only weak supply that is propping up the market, investors will be happy for this to continue until buyer numbers increase sufficiently to take up the slack. The percentage of investors planning to hold for 10 years increased from the 44% recorded in Q3 to 49% in Q4, and 22% intend to hold for 20 years or more. The average is a 12 year hold, two years more than last year's average.

Some 59% of investors are planning to increase their portfolio with new properties in the capital in the next 12 months, and 43% with properties outside the capital. This compares to 33% and 8% respectively in Q4 last year.

76% of investors believe that London property prices will be the same or higher than they are now in 12 months, up from the shocking low of 36% last year. 60% of respondents foresee property prices outside the capital rising in the next 12 months, the only surprise there is that the figure isn't higher.

Overall, landlords forecast that London property prices will be 0.7% higher than they are now by the end of 2010, and that the rest of the UK will see house prices 1% lower than they are now by the end of 2010.

For me the most significant of the findings of the Young index was that 39% of respondents cite lack of mortgage availability as their main concern going forward, up from 28% this time last year.

Landlords are undoubtedly buoyed by the several consecutive months of UK house price rises. However, the wider market is looking less and less healthy. As I said; it is only weak supply in some areas propping up house prices, now mortgage lending is falling again, repossessions and unemployment continue to rise, and the number of first time buyers -- the life blood of a healthy housing market -- continues to decrease.

Just under a fifth of those registered with estate agents were buying for the first time last month, according to the National Association of Estate Agents, which is a sharp fall from six months ago, when 43 per cent of the market was identified as first-time buyers.

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