Quarter of all landlords entered market this year

The Association of Residential Letting Agents says a quarter of all landlords entered the buy-to-let market in the past year.

The research is published in the latest quarterly Association of Residential Letting Agents Review and Index of the Private Rented Sector.

It is supported by ARLA’s panel of mortgage lenders which comprises Birmingham Midshires, GMAC-RFC, NatWest Mortgage Services, Paragon Mortgages and The Mortgage Business.

The research also reveals nearly six in 10 investor landlords expect to acquire further property in the coming year.

The average length of time spent in the rental market for most investors is over five years, and only 1.5% of all landlords would consider selling if house prices fall.

Just one in 12 investors say they became residential landlords solely for an income stream. And despite fears that some of the new regulations for the private rented sector would deter investors, only 4% of buy-to-let landlords expect to be affected by mandatory licensing for houses in multiple occupation, which comes into force next month.

But investors in London are deserting the capital for more lucrative opportunities in other regions, research from Landlord Mortgages reveals.

Only 8.56% of rental properties purchased over the past year were in London, which boasts the most expensive average buy-to-let properties at 223,997. This is 5% down from 2003/04 figures despite the fact that over 15% of England’s viable residential stock is in London.

The most popular region to invest in over the past year was the South-East as many London landlords looked further afield for investment opportunities.

Lee Grandin, managing director of Landlord Mortgages, says: “The capital is too expensive to provide the yields and capital appreciation investors are looking for.”