Business is booming for buy to let landlords with high demand to rent their homes from tenants and improving returns on their investments.
Just over 90% of landlords report a steady flow of inquiries from tenants over the past three months, according to the latest buy to let landlord confidence survey from Paragon Mortgages.
Well over half of landlords (57%) reported stable tenant demand - with a third (34%) calling demand as growing or booming and just 6% stating demand for their homes was falling.
Most landlords expect to see a buoyant buy to let market over the next 12 months - with 39% predicting tenant demand will increase, 46% expect the market to remain the same, while only 6% forecast a decline in demand.
Properties are standing empty for less time between tenancies as well - with rental voids averaging 19.6 days.
Income has not changed much, despite surveys in the media pointing to rapidly rising average rents breaking the £800 per month barrier for the first time.
More than two-thirds of landlords (68%) say rental income has not changed, while a quarter (27%) reported they were charging higher rents and 5% confessed their income was falling.
Yields are an average 6.2%, but landlords with larger portfolios are receiving an average 6.6% return, while those with fewer properties reported an average 5.2%. Most expect yields to stay the same for the next 12 months.
Steady demand and yields are encouraging 16% of landlords to buy more property to let - with 58% looking for flats, maisonettes or terraced houses; 30% seeking semi-detached houses and 21% wanting detached homes.
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.”
