Landlords are turning from the long-time favourite of terraced house investment to flats and semi-detached homes, according to a market survey.
Research by specialist landlord lender Paragon Mortgages shows flats are vying with terraced homes as the main target for investors planning to increase their property portfolios.
More than one in six landlords expects to buy more property before the end of the year, while landlords who own multiple properties are more likely to buy (20%) than those with single investments (6%).
Terraced homes remain a popular investment option, explained the lender, but the popularity of flats, maisonettes, semi-detached and detached houses have risen to their highest level this year.
Buy to let property choice
Landlords plan to spend their money on:
● Flats/maisonettes (58%)
● Terraced houses (58%)
● Semi-detached houses (30%)
● Detached houses (21%)
● Bungalows (9%)
● Multi-unit blocks (9%)
● Houses in multiple occupation or HMOs (6%)
John Heron, the lender’s managing director, said: "It is encouraging to see private landlords looking to invest in a wider variety of property types.
"This may well be in response to the fact that we are starting to see higher demand for larger rented properties from families who are choosing the private rented sector because they do not want to, or cannot buy in today's difficult economic environment.
"This responsiveness of landlord to change in housing demand is one of the major strengths of the sector and it would be good to see policy makers work with private landlords to make more of this capability."
Landlord mortgage rates cut
The Council of Mortgage Lenders has already reported an increase in buy-to-let lending by 5% in the three months to June.
Lenders agreed 33,200 loans, worth £3.9 billion in the quarter.
In the year to the end of June 2012, the number of buy-to-let loans was up 14% and the amount advanced increased 18% - but the market is still running at just a third of the peak in 2007.
Paul Smee, director general of the Council of Mortgage Lenders, said: "Buy-to-let is continuing to show signs of recovery, and growing broadly in line with expectations.
Abbey for intermediaries, the specialist buy to let arm of Santander for brokers, has cut rates on landlord mortgages by 1.04%.
A 75% loan to value two-year fix is down to a rate of 4.15%, while a two-year fix at 60% LTV fior buyers is down 0.60% to 3.69%.
Managing director Miguel Sard said: “We are pleased to support landlords with significant rate reductions across our range and new deals.
“With rates coming down across our buy-to-let range, we expect to see strong demand.”