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UK Buy-To-Let landlords experience a stable 3rd quarter of 2012

  • 91% of UK Buy-To-Let landlords think that tenant demand in the UK is either stable or increasing.

    Rental Yields Up, Tenant Demand Up - UK landlords Are Happy!

    Rental Yields Up, Tenant Demand Up – UK landlords Are Happy!

The findings come from the latest Paragon Mortgages PRS Trend survey and a huge number of landlords surveyed reckon that tenant demand was either stable or growing.

  • Only 6% of landlords who took part in the survey said that, in their opinion, tenant demand was declining.

Landlords also reported an average property portfolio size of 12.5 properties in the third quarter. In terms of expectations, landlords anticipate this will increase to 12.9 properties in 12 months’ time.

  • Stable and healthy yields were achieved in the third quarter, with a reported average of 6.2%.
  • Professional landlords achieved a higher average yield than smaller-scale landlords, 6.6% compared to 5.2%.
  • Landlords are expecting to retain a stable yield for the foreseeable future, forecasting an average of 6.2% in 12 months’ time.

68% of landlords who agreed to take part in the survey said that their rental income had remained the same during the third quarter, whilst 27% said that rents had increased, just 5% of landlords had experienced a decrease in rent.

The average void period slightly increased to 2.8 weeks compared to 2.7 weeks in the 2nd quarter of the year, however void periods continue to remain low and have not exceeded three weeks since mid-2010.

Landlords are set to continue expanding their property investments in the final quarter of the year, with 16% planning to expand their rental property portfolios.

  • 58% are expecting to buy flats/maisonettes or terraced houses
  • 30% semi-detached houses
  • 21% are looking to buy detached properties.

John Heron, Managing Director of Paragon Mortgages, said: “It has been a stable quarter for landlords. Yields have remained healthy and at a consistent level for the past 12 months. It is not surprising that landlords are continuing to see high levels of tenant demand and I suspect this will continue into Q4 and the coming year. The PRS is under increasing strain with the growing shortage of homes in the UK, housing policy needs to focus more on motivating private landlords to grow their portfolios to better meet demand.”

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