5th June 2014
Landlord confidence is at a high with many looking to cash in on the UK’s booming housing market over the coming 12 months writes Philip Scott.
Research from specialist buy-to-let lender Paragon Mortgages found that 25% of landlords it surveyed are planning to buy further rental properties in the next year alone.
The group’s survey of 1,000 landlords comes as the Halifax reports that in May house prices surged by 3.9% month-on-month, marking an 8.7% rise over the past year, putting further pressure on the Bank of England to tackle the UK’s property bubble.
Almost three quarters, at 74% of landlords planning to make property purchases said they would be looking for one near their home, and just 10% said that they would be prepared to buy further afield, but only up to 100 miles.
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The study also found that the most common factor a landlord considers when selecting a potential rental property is their local knowledge of an area. In total, some 86% of landlords say this is at the top of their checklist.
In addition, more than two thirds, at 68% of landlords said that strength of tenant demand in the local area was an important factor and 63% said that local rent levels were also a big consideration.
Other important factors landlords cited were the prospect of capital growth, at 56%, proximity to local transport connections – 55% – and future development plans in the area, at 37%.
John Heron, managing director of Paragon Mortgages, said: “Whilst the factors landlords have selected may not be entirely surprising, their feedback is important nonetheless. From time to time landlords get a bad press. What this research shows, and what we already know, is that the majority of landlords view the running of their portfolios as a business. They buy property only after careful consideration, and have a very strong preference for investing in their own local communities.”
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