Research from Paragon, which surveyed 390 portfolio landlords with four or more properties in December 2023, found that 55 per cent would fund purchases by releasing equity from other properties in their portfolio and 58 per cent would use existing capital.
Around 69 per cent said that those adding property are doing so as part of a portfolio expansion strategy, 60 per cent pointed to long-term tenant demand, and half will do so as part of their retirement plan.
Approximately 61 per cent of landlords will buy with a mortgage and 39 per cent will purchase outright.
Looking at property type, 52 per cent of landlords would opt for terraced homes, 46 per cent for semi-detached homes and 26 per cent for individual flats.
Overall, 36 per cent of landlords said they would keep their portfolio in its current state and 21 per cent said they would make investments.
Nearly a quarter of landlords said they intend to buy houses in multiple occupation (HMO) and 20 per cent said they would look for properties that can be converted into HMOs.
The future of BTL
Richard Rowntree, managing director of mortgages at Paragon Bank, said: “Portfolio landlords are optimistic about the future of the buy-to-let (BTL) market and are looking to take advantage of the opportunities that arise in 2024.
“One of the ways they can do this is by remortgaging their existing properties, mortgaged or unencumbered, and releasing equity to fund new purchases. This can help them diversify their portfolios, increase their rental income, and secure their long-term financial goals.”
He added: “We are committed to supporting portfolio landlords with a range of specialist products and services, including flexible and competitive remortgage options.
“Portfolio landlords are experienced and savvy investors who know how to maximise their returns by targeting properties that offer higher yields. HMOs are one of the most attractive options for portfolio landlords, as they can generate more income per property and reduce the risk of void periods.
“However, HMOs also require more management and compliance, which is why portfolio landlords need a specialist lender who can understand their needs and provide tailored solutions.”
The results echo a report from Together, which found that more than a third of BTL landlords are planning to expand their portfolios in the next 12 months.
