Buy to let landlords are cashing in on the rental boom by adding more homes to their property portfolios, according to new research.
Landlords told mortgage lender Paragon that they were buying homes in the third quarter of the year – and the average portfolio size is creeping up from 13.3 properties in the second quarter to 14.7 in the following quarter.
And the landlords taking part in the study disclosed that they will buy more homes if they can in the last quarter of 2013.
Overall, buy to let landlords told Paragon that financing property investment was becoming easier, with 37% saying funding was ‘reasonably available’ – up from 35% in the second quarter and 25% a year ago.
However, the reverse slant is 63% of landlords feel buy to let funding is not ‘reasonably available’, although that’s an improvement on 75% 12 months ago.
Tenant demand was described as stable or growing by 91% of landlords.
Average void periods are 2.9 weeks and average gross rental yield sticks at 6.4%.
John Heron, the firm’s director of mortgages said: “The third quarter survey paints an encouraging picture of growth in the private rented sector, suggesting landlords increasingly have the confidence to invest because of improved access to finance.
“Demand for private rented accommodation remains high and it is vital that this emerging confidence in the landlord community is nurtured in order to maintain the growth in supply.
“Lenders are clearly improving their buy-to-let finance propositions in a bid to increase lending volumes. This is helping landlords expand their portfolios but we must ensure that this lending is sustainable and particularly that lending remains affordable to borrowers over the long term.”
The mortgage company conducts a private rental market survey every quarter.