Landlords 'expect to expand portfolios'

News Category: Industry News

New landlords entering the buy-to-let market expect to double the size of their portfolio in the next five years, new research indicates.

Figures from the Mortgage Trust show that those landlords who currently own an average of 1.8 rental properties plan to grow their portfolio to four by 2012.

The company suggests that the rising number of students and migrant workers in the UK will fuel demand for rental properties, meaning that landlords can ignore fears about increasing interest rates to some degree.

Indeed, the figures show that the proportion of tenants who are students has increased from seven per cent in January to 15 per cent now. Similarly, migrant workers currently make up six per cent of tenants - compared to three per cent at the beginning of the year.

"Some people are sceptical about whether landlords … are being squeezed by higher interest rates - causing them to lose confidence in the market," explained John Heron, director of mortgages at thecompany.

"This is not the case, the majority of small scale investors have no plans to sell their properties, instead they remain confident that they will be able to add significantly to their portfolios over the short and medium term."

In particular, the figures showed that people are opting to live in houses in multiple occupancy (HMOs) - which befits landlords as it increases yields.

Recent data showed that landlords have enjoyed steady yields of around six per cent in the last year.