Number of families turning to rented accommodation predicted to rise
Investors in buy-to-let properties could find that there is increasing demand for rented accommodation from families in the near future.
According to John Heron, managing director of buy-to-let specialist Paragon Mortgages, families are set to make up an increasing proportion of tenants over the next few years as it becomes increasingly difficult for first-time buyers to get on the property ladder.
In an article for mortgagestrategy.co.uk, he wrote: "Young couples and single-person households will continue to account for a large part of the rental sector, but over the next few years we will see more families renting as their tenure of choice."
While landlords could benefit from targeting the expanding family market, Mr Heron warned that this could involve more planning than is needed when lending to more traditional demographics.
"Landlords should focus on what families need as it is often more varied than the requirements of young couples or single professionals," he said.
A recent survey by Paragon revealed that many investors in buy-to-let properties are already catching on to this trend, finding that landlords seeking to expand their portfolios are looking to purchase houses.
Of those interviewed, 41 per cent, up from 28 per cent the previous quarter, said they would be looking to buy semi-detached property, and 22 per cent, up from nine per cent, said they were considering detached properties.
Landlords polled also reported that 45 per cent of their tenants were families with children.
In a separate survey by the firm, 40 per cent of landlords said they thought that overall tenant demand was growing and 42 per cent expect it to grow further over the next 12 months.
Mr Heron's comments follow recently released government figures which revealed that 17.4 per cent of homes are now within the private rented sector, an increase from 16.4 per cent in 2009.
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