Ten Percent of Landlords Plan to Buy Residential Properties

According to figures compiled by Paragon Mortgages, 10 percent of all residential landlords expect to purchase new rental properties within the next three to four months. Those in the buy-to-let sector that plan to expand their portfolios hope to do so during the first quarter and the most sought-after properties are terraced homes.

Landlords with only a small handful of properties increasingly prefer well-built terraced houses, as they tend to be easier to maintain and rent. In fact, 65 percent of all landlords expecting to add to their list of properties are looking to purchase terraced homes, while only one in four would like to buy a semi-detached house. An even smaller proportion (one in five) is looking to extend their rental business by purchasing a flat. But at the moment, Paragon found that the least popular option among landlords is to purchase a fully detached house.

Nevertheless, the continued lack of financing in the buy-to-let sector not only limits the ability of landlords to expand, but also to provide Britain’s growing tenant population a wide array of rental options. Yet this appears to be the ideal time to buy, with John Heron—Paragon’s managing director—noting that home values remain “soft,” while tenant demand is still high, and outstrips supply in much of London. The growth in the private rental sector, however, is not a new phenomenon. Over the past 17 years, the proportion of Britons renting homes rose from 9 percent to over 14 percent.