Are landlords now looking for a different approach?

Are landlords now looking for a different approach?

One of the keys to a successful investment in the buy-to-let market is making sure to buy the right kind of stock. Often, this can change as the demands of tenants does, and you may need to change, as a new report suggests that many landlords are now doing this. 

According to the findings from Paragon Mortgages, tenants are now turning away from the previously popular terraced homes - second only to flats with British tenants - and are instead looking towards semi-detached homes. 

This, in turn, has led to an increase in the number of landlords who are buying semi-detached properties for their portfolio. In the latest survey, some 35 per cent of buy-to-let landlords with intentions to expand their stock in the near future said that semi-detached houses are their number one target. This is compared to 23 per cent who said the same at the end of last year.

As a result, the volume who are looking to buy terraced properties has fallen significantly, from 67 per cent during the final quarter of 2014 to just 35 per cent in 2015.

These changes leave semi-detached sentiment higher than flats at the current time. Although the majority of landlords who own only one property have flats on their portfolio, moving forward, only 30 per cent of those with a view to expand said they are going to be looking towards this asset type. 

"A closer look at interest levels for different property types suggests landlords are taking a broader perspective in order to cater for the wider range of households looking for a suitable home in the rental sector," said John Heron, director of mortgages at Paragon. 

In a general sense, sentiment among landlords about the prospects of the property market remain high, with some 27 per cent feeling the market is looking good in the immediate future. The volume who think they will buy in the next three months has also climbed from 15 per cent in quarter four of 2014 to 18 per cent now. 

"The growing proportion of landlords looking to purchase buy to let property sometime soon points to continued, steady growth in the private rented sector," concluded Mr Heron.