The percentage of landlords planning to sell their buy-to-let property is falling, thanks to rising tenant demand and strategies to cope with the government's tax changes, a survey has shown,
Paragon Mortgages said the number of landlords planning to sell their property is down from 25 per cent in the first quarter of last year to 17 per cent, despite the reduction of interest rate relief on buy-to-let properties that begins in April this year.
The percentage of landlords planning to buy more properties has also risen, with the proportion of British landlords planning to buy property up from a record low of nine per cent twelve months ago to 13 per cent this quarter.
Of the 204 landlords interviewed, nine in 10 described tenant demand as stable or growing, with fewer than one in 30 suggesting a decline. Nearly half of all respondents said that their properties stand empty for fewer than two weeks a year. Average yields also remained stable at 6.1 per cent.
John Heron, managing director of Paragon Mortgages, said: “With no material improvement in the supply of new housing against a background of strong population growth and household formation, it is no surprise that landlords are continuing to experience strong rental demand.
"It is promising therefore that there has been some improvement in landlord buying intentions albeit from a low base."
Landlords are most likely to buy terraced houses, with the proportion planning to buy flats or maisonettes decreasing sharply from last quarter from 67 per cent to 31 per cent.
Jonathan Holden from GM Mortgage Solutions in Armagh, said that demand for buy-to-let mortgages remained strong among existing landlords, but less so among those who have not held buy to let property before.
"Existing landlords have seen the profit and the yield. They don't like the tax changes, but they are willing to pay the extra few thousand," he said.
rosie.murraywest@ft.com
