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07th September 2011

Sharp rise in landlords looking to invest in family homes

There has been a surge in the number of landlords looking to invest in buy-to-let properties that would be suitable for families, new research from Paragon has found.

The mortgage provider's latest Trends survey revealed that, of those landlords planning to purchase new properties during the third quarter of the year, 41 per cent are looking to invest in semi-detached houses and 22 per cent are looking to buy a detached property.

In comparison, just 28 per cent of buy-to-let investors were planning to purchase a semi-detached house last quarter, while only nine per cent had their sights set on a detached property.

The quarter-on-quarter increase could be down to rising demand for rented accommodation from families who are finding finance to buy their own homes too hard to secure in the current market.

Paragon's figures show that nearly half (45 per cent) of landlords now have families as tenants, making them the fourth largest tenant group after young couples (55 per cent), professionals (52 per cent) and young singles (50 per cent).

Nigel Terrington, Paragon Group chief executive, said: "It is interesting to see more families relying on the PRS (private rented sector), and this is certainly a trend which I expect to stay.

"Young couples and single person households will continue to account for a large proportion of the PRS, but I think over the next few years we will see more families making use of the flexibility and affordable accommodation that the PRS provides."

Meanwhile, this week saw the Department for Communities and Local Government launch a series of factsheets designed to help landlords and tenants avoid disputes by informing them of their respective rights and responsibilities and offering advice on dealing with disagreements.