Investors Look at New Property Types

Landlords may still favour flats and terraced houses when looking at buying to let, however, they are beginning to broaden their choices by investing in other types of property, according to Paragon Mortgages.

Paragon Mortgages’ latest research found that 58% of respondents said that during the last quarter of 2012, they would look to invest in flats. 58% also said terraced houses, 30% in semi-detached homes, and 21% in detached properties. Of the landlords surveyed, 16% says that they expected to increase their portfolio this quarter.¹

The rise in landlords looking to invest in larger homes may mirror the amount of families looking to rent, rather than buy. A lot of those who would have previously bought a house are unable to get mortgages, or cannot sell their house but need to move away, so are renting elsewhere.

Managing Director of Paragon Mortgages, John Heron, says: “This responsiveness of the private rented sector to changes in the shape of housing demand is one of the major strengths of the sector and it would be good to see policymakers work with private landlords to make more of this capability.”1

Typically, student accommodation and Houses in Multiple Occupation (HMOs) generate the highest yields for landlords, however, they are often more difficult to manage. Landlords renting to families may not experience such high returns, but may have an easier job to do.

¹http://www.justlandlords.co.uk/news/Investors-Look-to-New-Property-Types-1422.html