Research for Paragon has found that landlords across the Midlands are most likely to add to their property portfolios over the next 12 months.
A quarterly survey of nearly 800 landlords conducted by BVA BDRC found that 24% of landlords in the East Midlands plan to purchase in the next 12 months, with 22% of West Midlands landlords also looking to buy.
Other regions that showed a high propensity to buy included the North East and Yorkshire & Humber, with 19% of landlords in both regions looking to purchase.
Landlords in the South West (8%) and Central London (9%) were the least likely to buy over the period. Overall, 14% of landlords plan to purchase property, with the average landlord acquiring three new properties.
52% of those looking to purchase are targeting terraced housing, followed by semi-detached property (32%) and flats (26%). One in four landlords also intends to purchase a House in Multiple Occupation (HMO) during the year, reflecting the growing popularity of this property type, particularly amongst professional, portfolio landlords.
| % of landlords planning to increase portfolio in next 12 months | |
| East of England | 13 |
| East Midlands | 24 |
| London (Central) | 9 |
| London (Outer) | 17 |
| North East | 19 |
| North West | 13 |
| South East | 15 |
| South West | 8 |
| Wales | 10 |
| West Midlands | 22 |
| Yorkshire and Humber | 19 |
Those with larger portfolios also expressed a greater propensity to buy. The research showed that 8% of landlords with one property said they would purchase during the year, rising to 20% for those with 20 or more.
Meanwhile, 12% of landlords with between two and three properties said they will buy, whilst the proportion of landlords with between four and five (15%), six and 10 (14%) and 11-19 (14%) properties looking to purchase was broadly balanced.
Richard Rowntree, Paragon managing director of mortgages, said: “The proportion of landlords looking to purchase new property has been largely consistent over the past two years, but we are seeing regional variations and also a greater propensity for portfolio landlords to invest in property.
“Portfolio landlords have adopted a number of strategies to adapt to the tax and regulatory changes of recent years and we’re seeing trends such as these landlords buying stock from smaller-scale participants as they exit the market, or targeting higher yielding properties, such as HMOs.”
The researched showed that nearly two thirds (63%) of landlords plan to fund their next purchase with a buy-to-let mortgage, whilst 17% will release equity from existing properties to generate purchase funds. Meanwhile, 18% said they would purchase property outright using previously invested funds.