Tenant demand fuels ambitions for aspiring landlords

Tenant demand fuels ambitions for aspiring landlords

0:01 AM, 29th August 2024, About 12 hours ago 3

Text Size

Long-term tenant demand and a desire to supplement retirement income are the primary drivers for aspiring landlords seeking to build property portfolios, research reveals.

According to Paragon Bank, the findings highlight a growing trend among landlords who are actively seeking to increase their rental income and build long-term wealth.

Its ‘Next Generation Landlord Report‘ surveyed 500 landlords with up to three properties and ambitions to build larger portfolios.

One key finding is that six in 10 landlords (60%) cited the ongoing demand for rental properties as a major factor in their decision to grow their portfolios.

‘Rental market is set for continued growth’

Paragon’s managing director of mortgages, Louisa Sedgwick, said: “The rental market is set for continued growth, driven by projected population increases of around 10% over the next decade.

“This favourable market outlook is underpinning the investment decisions of aspiring landlords.”

She adds: “The research also demonstrates a clear focus on long-term planning, with over half of landlords building portfolios to support their retirement.

“This indicates a strong commitment to the rental sector and is essential for the overall health of the private rented market.”

Add properties to their portfolios

The report also reveals that more than half of landlords (54%) are looking to add properties to their portfolios as a means of supplementing their retirement income.

And nearly half of respondents (47%) believe that long-term house price growth is a significant driver for their investment decisions.

The BTL lender also found that more than a third of landlords (34%) prefer property as an investment asset over other options.

Landlord’s decision to enter the PRS

The report also highlights the factors that influence a landlord’s decision to enter the PRS with friends and family playing a significant role for many.

Paragon found that 43% of landlords cite them as a primary motivation.

Also, a large proportion of landlords (39%) started renting out their first property by accident, often after purchasing a second home or inheriting property.

When asked why they chose property over other investments, landlords emphasised its tangible nature (67%), wealth-building potential (54%) and the ability to pass it on as an inheritance (53%).


Share This Article


Comments

Dylan Morris

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

10:11 AM, 29th August 2024, About 2 hours ago

They won’t be so keen in a couple of month’s time when they hear about the removal of Section 21 and the 20% tax credit, hardship test, minimum EPC C rating, increases to CGT and inheritance tax and rent controls.

NewYorkie

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

11:42 AM, 29th August 2024, About 36 minutes ago

Reply to the comment left by Dylan Morris at 29/08/2024 - 10:11
I think the key wording here is 'aspiring' landlords. Younger people with no PRS experience as an owner, and simply looking at the potential demand.

They need to understand why landlords with 20+ years experience have had enough. Yes, many are retiring [like me], but most see the writing on the wall, especially with this government, and have simply had enough.

northern landlord

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

12:21 PM, 29th August 2024, Less than a minute ago

I repeat my comment made earlier today. Paragon have a vested interest as they specialise in BTL mortgages, so of course they talk the situation up. What they don’t mention is any increase or decrease in the number of BTL mortgages granted. I suspect they are feeling the pinch, hence this flag waving advertorial feature. Paragon are saying “come on in the (PRS) water is lovely” in direct contrast to the other regular advertorial articles on these pages urging landlords get out of the water as it’s “freezing cold and will soon be shark infested as well”.

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now