In a survey of their own advisors, Paragon Mortgages found that 27% of cases in the third quarter dealt with first-time landlords, up from 22% in Q2. This is the highest level it has reached since the financial crisis.
In other research, conducted amongst the landlord community, Paragon reported that 91% of landlords say tenant demand remains high, while a total of 43% of intermediaries say landlord demand for buy-to-let finance is strong or very strong. The latter figure has risen steadily from 22% in Q3, 2012.
Also, the availability of buy-to-let finance has improved in the last three months, according to nearly six out of ten intermediaries.
Managing director John Heron said, “As demand for accommodation in the PRS continues to grow, we have seen a steady rise in the number of first-time landlords entering the sector, drawn by the potential for attractive yields relative to returns on cash and other investments and long-term capital growth.
“First-time landlords have been an important source of growth at a time when more established landlords with larger portfolios have found themselves constrained by limited equity.”
However, despite limited equity, established landlords seem to be performing well enough – the average rental portfolio size has seen a quarterly increase from 13.5 to 14.7 properties.
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