UK landlords 'planning to expand property portfolios'

by Sarah Ashcroft

Landlords operating in towns and cities across the UK are planning to expand their property portfolios in the first half of 2013, research from Mortgages for Business have revealed.

According to the company, 89 per cent of proprietors have suggested that they would like to purchase additional homes during the next six months, as high returns and ongoing demand for houses continue to drive the market.

Researchers found a further 79 per cent plan to take on renovation projects this year, while 41 per cent are looking to make improvements to their existing properties in a bid to improve standards for tenants.

David Whittaker, managing director of Mortgages for Business, said demand for property is growing as a result of a lack of mortgages that are suitable for first-time buyers.

He added: "Every month more and more would-be buyers are being forced to rent and this is pushing up demand to astronomical levels, producing very attractive gross yields for landlords as a result.

"Not surprising, then, that well over half of investors want to expand their portfolios to take advantage of these high yields. "

It comes after analysis from the National Landlords Association highlighted that avoiding falling into arrears is among the top priorities for property owners going into the new year, as well as minimising void periods.

However, the studies also noted that the coming months may not be plain sailing for proprietors, as 96 per cent voiced their concern over the introduction of Universal Credit, which will see direct payment of Local Housing Allowance come to an end.

Instead, the new regulations - which will be rolled out in April - combine many benefits into a single monthly payment in an effort by the government to reduce waste and improve efficiency.

Critics have argued more should be done by lenders to encourage property investors to obtain the necessary finance to ensure that tenants will be able to afford monthly payments.

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Published on: January 8, 2013

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