Landlords are feeling more positive about the outlook for their property portfolio; a survey by Paragon Mortgages who provide buy-to-let finance indicate close to a third of professional landlords take this view. This is the most optimistic response received since customers were first asked about how positive they feel almost three years ago. With a positive start to 2013, adding to the already good progress in the buy-to-let property market over the last year and a half, they certainly have plenty of reason to feel hopeful.
Cause to be positive
Optimism with regards to the availability of mortgage finance for buy-to-let purposes has increased from 29% in the last quarter of 2012 to 32% in the first three months of this year; just 2% of those involved in the survey thought finance was not obtainable. Of those landlords surveyed, on average their property portfolio is worth £1.61 million and contains 13.2 terraced properties – the most popular type of home to rent by landlords – which they predict will increase to 13.7 properties. The indication that they plan to expand their portfolios is no doubt helped by feelings that mortgages are more available. The survey also indicated that professional landlords are achieving yields on average of 6.6%, which compares to 4.7% for those who are private investors. Periods where their properties are standing empty is additionally continuing to fall thanks to high demand from tenants; this was down from 3 weeks at the end of last year to 2.8 weeks after the first quarter of 2013, though has still not returned to the level of 2.6 weeks seen at the end of March 2012.
Further investment in buy-to-let
The shortage of properties for tenants is a cue for further investment in properties by landlords. While professional landlords are likely to find this more difficult than private landlords with regards to obtaining additional mortgages or releasing equity, it is hoped that those operating on a smaller scale for investment purposes will help to keep up the momentum within the buy-to-let market. With rental charges continuing to rise and the opportunity to make a far higher and more secure return than investing capital elsewhere, it is an ideal time for investment within property. It is therefore no surprise that more people are exploring the option of turning to buy-to-let property. Careful consideration into the types of property and their location will help to maximise returns and allow continued optimism.
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