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Portfolio Landlords Set Sights on Expansion, Paragon Bank Study Reveals

A recent study by Paragon Bank has unveiled that a significant portion of portfolio landlords in the UK, specifically those owning four or more properties, are gearing up for expansion in the coming year. According to the research, 37% of these landlords are contemplating growing their property portfolios in 2024, with the majority planning to finance their acquisitions through equity release from existing assets or utilizing available funds, as indicated by 55% and 58% of respondents, respectively.

This strategic move was highlighted in Paragon’s latest Portfolio Landlord Report 2024, which surveyed nearly 400 landlords across the nation. The study elucidates that 69% of landlords aiming to acquire more properties are motivated by a strategy to expand their portfolios. Additionally, 60% cite the enduring demand for rental properties as a key driver, while half of the respondents view these acquisitions as a cornerstone of their retirement planning.

The research further disclosed that 61% of landlords prefer to purchase additional properties using mortgages, whereas 39% intend to buy outright. Preference in property types was also noted, with 52% favouring terraced houses, 46% opting for semi-detached homes, and 26% looking at individual flats.

Amid these expansion plans, 36% of portfolio landlords plan to maintain their current portfolio size, whereas a smaller fraction, 21%, are considering downsizing.

Richard Rowntree, Paragon Bank’s Managing Director of Mortgages, expressed optimism about the future of the buy-to-let market. He emphasized the strategic approach of remortgaging existing properties, whether mortgaged or unencumbered, as a means to unlock equity for new investments. This strategy, according to Rowntree, not only aids in diversifying portfolios but also enhances rental income and supports landlords in achieving their long-term financial objectives.

Rowntree further highlighted the bank’s commitment to assisting portfolio landlords through specialized products and flexible remortgage options that cater to their unique needs.

The study also sheds light on the landlords’ inclination towards properties with higher yield potential, such as Houses in Multiple Occupation (HMOs) or those convertible into HMOs, with 21% of landlords eyeing HMOs and 20% considering properties suitable for HMO conversion. Rowntree remarked on the savvy investment strategies of portfolio landlords, noting HMOs as particularly lucrative due to their potential for increased income and reduced vacancy risks, albeit requiring more intensive management and compliance efforts.

In conclusion, the findings from Paragon Bank’s research paint a picture of a proactive and strategic community of portfolio landlords eager to capitalize on the opportunities presented in 2024, with a clear focus on growth, diversification, and yield optimisation.


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