Optimism has grown among landlords for their buy-to-let prospects, according to a new report.
Almost a quarter of landlords are feeling more optimistic about the prospects for their property portfolios, rental income and yields, Paragon Mortgage’s Q2 Private Rented Sector Trends Report reveals.
They are encouraged by the availability of buy-to-let finance, with 22% in the second quarter of this year saying that it was reasonably available, compared with 17% in the first quarter.
Some 23% of landlords feel more optimistic than was the case in Q1, particularly if they are professional landlords, 30% stating they were more optimistic, compared with 15% of smaller-scale landlords.
On average, landlords expect to have 13.1 residential properties in their portfolios in a year’s time, compared with 12.6 properties currently - the first time in two years that landlords have predicted an increase in the number of properties in their portfolios.
Nearly three out of ten landlords (29%) have increased rents during the second quarter, the majority of whom reported an increase of between 2% and 4%, states the report.
Landlords are also more optimistic about the net value of their portfolios, with a growing proportion expecting an increase in value (14% in Q2 against 13% in Q1), and fewer are forecasting declining values (12% Q2 vs 19% Q1). The majority of landlords (74%) expect net values to remain the same.
The report also shows a shift in the types of property that landlords are looking to add to their portfolios during the third quarter. Of those looking to purchase during the quarter, terrace houses are the most popular choice, with more than half of landlords saying they expect to buy this type of property.
There have also been increases in the popularity of semi-detached houses (up from 28% to 41%) and detached (up from 9% to 22%).
Commenting on the report, Adam Offer, managing director of Besley Hill, the South West’s biggest network of independent estate agents, says: “The trend shown by this report is consistent with the increasing number of buy-to-let deals being arranged for landlords by the Mortgage Advice Bureau (MAB) representatives at our offices throughout Bristol and Gloucestershire.”
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