Landlord optimism continues to grow
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Almost a quarter of landlords are feeling more optimistic about the prospects for their property portfolios, rental income and yields, buy-to-let mortgage specialist Paragon has revealed.
The Q2 Private Rented Sector Trends Report, which gives an overview of the PRS sector and buy-to-let market, showed 23% of landlords feel more optimistic about the prospects for their portfolios.
Optimism was particularly high amongst professional landlords, with 30% stating they where more optimistic, compared with 15% of smaller-scale landlords.
Demonstrating their increasing optimism, on average, landlords expect to have 13.1 residential properties in their portfolios in a year’s time, compared to 12.6 properties currently. This is the first time in two years that landlords have predicted an increase in the number of properties in their portfolios.
Rental income is particularly healthy, with three out of ten landlords, 29%, having increased their income during the second quarter, the majority of which reported an increase of between 2% and 4%.
Landlords are also more optimistic about the net value of their portfolios, with a growing proportion expecting an increase in value, 14% Q2 vs 13% Q1,and fewer forecasting declining values, 12% Q2 vs 19% Q1.
The majority of landlords, 74%, expect net values to remain the same.
Also highlighted in the report was an interesting 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, terraced houses are the most popular choice with more than half of landlords saying they expect to buy this type of property.
However, there has also been significant increases in the popularity of semi-detached houses, up from 28% to 41% and detached, up from 9% to 22%.
Nigel Terrington, chief executive of Paragon Group, says: “Our report emphasises the fact that there is significantly more optimism amongst landlords in the private rented sector and the buy-to-let market, and that looks likely to increase during the coming quarters.”
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