Partner Article

Study predicts property up-turn

A growing proportion of landlords are planning to purchase residential property for investment purposes, a new report has found.

Paragon Mortgages’ PRS Trends Report - a quarterly snapshot of the private rented sector and buy-to-let market - shows that 12% of landlords are planning to purchase in the second quarter of 2010, compared to 10% who said they would buy in the first quarter of the year.

Of those planning to purchase, terraced housing is the preferred option, with just over two thirds of landlords (67%) intending to purchase this type of property, followed by semi-detached housing (25%).

Demand for property investment has remained strong during the recession and has improved since house prices stabilised.

Landlords know that the long-term forecast for tenant demand is extremely healthy, with socio-economic and demographic changes leading to growth in the number of households calling the private rented sector home.

John Heron, Paragon Mortgages’ managing director, said: “One in seven households now calls the PRS home and Government figures show that the private rented sector is the only housing tenure that is currently growing.

“The proportion of households in both owner-occupation and social housing was in decline for the best part of the previous decade, and the private rented sector has picked up the slack.”

Meanwhile, access to mortgage finance remains difficult for most landlords. Of those who attempted to secure mortgage finance for purchase or remortgage purposes during the first quarter, 82% said it was more difficult compared to the previous quarter, with 7% stating it was slightly easier.

This was posted in Bdaily's Members' News section by Ruth Mitchell .