The buy-to-let sector has remained resilient in recent months, and investors are still seeing the value of the security of a bricks and mortar purchase.

The number of portfolio buy-to-let landlords seeking property in June soared by 21%, according to the latest data from Legal & General’s SmartrCriteria tool. In the consumer buy-to-let space, the tool noted an increase of 7%

Interestingly, the data also found an increase in the search criteria ‘Holiday let/Airbnb’, bringing it to the ninth most searched for term for investors looking at their next purchase. The pandemic has prompted an increase in the number of holidaymakers opting to stay local rather than travel abroad, and the holiday lets sector has boomed as a result.

Another popular search term on Legal & General’s tool was ‘First-time buyer/first-time landlord/non-owner occupier’, which was the third-highest criteria. The SmartrCriteria tool is designed to track product searches from more than 8,000 advisers, highlighting purchase trends across the UK.

Danny Belton, head of lender relationships, Legal & General Mortgage Club, said: “It is reassuring to see strong demand across the board despite wider economic pressure. The fifth consecutive base rate rise, which came mid-month, does not seem to have dented the high levels of activity in the market and brokers and lenders alike are still as busy as ever.

“With product criteria changes coming thick and fast, advisers have a crucial role in reassuring and educating buyers through what might be a more difficult mortgage journey.”

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Rental market performing well

To back up the appetite that Legal & General has found in the buy-to-let sector, some recent research from Fleet Mortgages also revealed that yields are holding up well for landlords through the current difficult climate.

Its latest quarterly barometer found that the average rental yield in the UK is now 5.5%, which is only slightly down on the previous quarter by 0.2%. It shows that yields are “holding up well”, according to Fleet’s chief commercial officer Steve Cox.

He said: “This is, without doubt, a very interesting period for landlords, lenders, and the wider private rental sector, as we seek to marry up a number of ongoing issues which are all having an impact.

“The positive news is that, as our Rental Barometer shows, yields are holding up well, and while we have seen a drop-off since the highs of last year, in general, there has been consistency across most regions on a quarterly basis.”

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North west, north east and Yorkshire at the top

Over recent years, it has been no secret that London, which once dominated many house price and rental trackers, has fallen behind some of the regions in the UK when it comes to both house price growth and rental yields. The same goes for future predictions, with most forecasters putting the north west, Yorkshire and the north east at the top of the ranks

Fleet Mortgages’ barometer also puts these three regions at the top when it comes to rental yields over the past quarter.

Further to this, the north west, Midlands and south west all saw no change in yields in a quarter-on-quarter comparison. The only areas where buy-to-let owners have seen an uptick in rental yields in Q2 2022 were Wales and the East Midlands.

Steve Cox added that, in these top-performing areas, properties are highly sought after, and rents are strong “due to the scarcity value of quality homes”.

“Our anticipation is that, in most regions of the UK, yields will stay pretty constant especially while this supply-demand imbalance is in place.”

The barometer also hones in on some of the towns and cities that are proving to be hotbeds of property investment activity right now, including Liverpool, Manchester, Sheffield, Bristol and Cardiff.