Research by one firm reveals that the number of investors with between five and 10 buy to let properties has risen from 14% to 37%, and the number who own between 11 and 19 properties has grown by 55%.
The figures have been compiled by mortgage lender The Mortgage Works (TMW), an arm of the Nationwide, and they have also calculated how many properties it would take for an investor to make their dream move into becoming a professional landlord.
The answer is: 10 properties.
However, the researchers revealed that those looking to earn a passive income from property may struggle since they may well need more than 10 to achieve their dream of going pro.
Landlords can use gearing to grow their portfolio
Instead, the mortgage firm says that landlords should look at gearing to unlock the potential of their property portfolio.
Gearing is a way for landlords to buy more than one property by splitting a cash deposit over several homes rather than a single one.
By having several properties, the prospect of enjoying a higher price appreciation across a portfolio is increased.
A spokesman for TMW says: “By splitting their investment over several properties with buy to let mortgages, the investor has the potential to increase rental yield when interest rates and rents align in the right way.
“And since mortgage repayments are tax-deductible this also increases the net rental income a landlord will receive.”
However, the firm also warns that gearing also leaves investor landlords vulnerable should interest rates rise and void periods increase.
This element of risk can be managed by taking out fixed-rate long-term mortgages and the potential for rental void periods should always play a vital part of any investment planning being made by a potential investor.
Landlords go on property buying spree
It's also important, the firm adds, that anyone thinking of expanding their buy to let portfolio by using gearing should discuss their options with an independent mortgage adviser.
News that increasing numbers of buy to let landlords are looking to grow their portfolios and become professional investors, coincides with a huge increase in the number of mortgages available for them to realise their ambitions.
Indeed, there's been a dramatic increase in the number of mortgage products available for buy to let investors released in the last three months, according to Mortgages for Business.
There are now around 550 buy-to-let mortgage products for investors to choose from and this has led to a ‘buying spree’ as landlords take up these new mortgaging opportunities.
