Where are landlords most likely to be growing their portfolio?

Landlords are still picking up property in the East and West Midlands despite a significant drop in purchase activity in Central London and more modest reductions across the rest of the country, according to a recent Paragon survey.

Related topics:  Landlords
Rozi Jones
21st August 2018
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"These findings highlight a big regional difference in landlord experience and buying habits. "

Figures from UK Finance show that buy-to-let mortgages for property purchase have fallen by around 40% overall since 2015 following the announcement of tax and regulatory changes for the sector.

Landlords in the Midlands however seem to be bucking the trend, boosted by strong economic growth in the region, a thriving higher education sector and continued regeneration of Birmingham.

More than four out of ten landlords in the East Midlands (42%) and one third of landlords in the West Midlands (33%) said tenant demand was increasing, compared with just under a quarter of all landlords (24%) who indicated rising demand.

Rental yields for landlords operating in the Midlands were also strong, with landlords in the East Midlands reporting average yields of 6.7% and those in the West Midlands achieving yields of 6.2%. Rental yield measures annual rent as a proportion of a property’s value and provides a valuable way to compare the return on different properties as well as different asset classes.

Landlords operating in Central London were least likely to be buying property, with a net 16% saying they had sold some property in the last quarter.

John Heron, managing director of mortgages at Paragon, said: “These findings highlight a big regional difference in landlord experience and buying habits. Some Central London landlords appear to be scaling back a little while landlords in the Midlands continue to invest on the back of a positive outlook.”

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