Paragon Mortgages’ quarterly survey of buy-to-let trends found confidence levels among landlords returning to last spring’s levels.
The research highlights an estimated average 21% rise in portfolio size over the next 12 months, with landlords expecting price rises of almost 7%. This will take the size of the average portfolio from around nine to just under 11 properties.
John Heron, managing director of Paragon Mortgages, said: ‘The main driver for confidence is not so much the strength of the housing market, but the signals landlords are receiving regarding tenant demand. There is strength at the top-end of the market from those who find property too expensive at the moment and at the bottom due to lack of supply in the social housing sector.’
The survey showed current average gearing of a buy-to-let portfolio up slightly at 44%, from 43%. Net annual rental returns are averaging 6.3% for professional landlords and 5.6% for amateurs. Reported void periods have dropped from an average of just over 19 days to just under 18 days, with 48% of landlords reporting average voids of less than two weeks.
Heron added: ‘One reads in the press of landlords having problems, but we have not seen that in the reported void periods. This is supported by the Council of Mortgage Lenders’ figures as well, as arrears levels in this market have reduced.’