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Buy-to-let landlords report leap in tenant demand

Emma Lunn
Written By:
Emma Lunn
Posted:
Updated:
12/01/2015

The latest landlord research from buy-to-let mortgage lender Paragon Mortgages shows landlords are still experiencing high levels of demand during the third quarter.

The Private Rented Sector Trends survey tracks landlord confidence and their views on the wider buy-to-let market.

In the third quarter 41% of landlords surveyed said tenant demand was either growing or booming. However, just over half said demand was stable. Just 3% of landlords described tenant demand as declining.

Looking ahead, 61% of landlords felt that the level of tenant arrears would remain stable over the next 12 months. In comparison 12% of landlords stated that in their view tenant arrears would increase and 8% expect a decrease.

Landlords were also asked what the most important factor is when they are looking for new buy-to-let mortgage finance. Interest rates, average loan-to-value and product fee were rated as most important.

John Heron, director of mortgages at Paragon, said: “Last year, the Council of Mortgage Lenders (CML) reported total buy-to-let lending for 2013 at £20.7bn.

“Current thinking is that gross buy-to-let lending this year will be around the £25bn mark, which represents a healthy increase over 2013 – but there has been some evidence that the rate of growth has slowed as the year has progressed.”

Elsewhere Kent Reliance predicted that the value of property owned by landlords in Great Britain will break the £1 trillion barrier next year.

Its report calculated the total value of property in the PRS has now reached £930.7bn, climbing by £109.5bn in the past year alone.