The findings indicate that new buy-to-let investors are putting their money into property because they are confident of the long term rewards. 75 per cent of landlords expect to hold on to their property for more than five years, with 26 per cent saying they foresee keeping their first property investment for in excess of 15 years.
John Heron, managing director of the Paragon Group, commented: “Contrary to some reports, new landlords are continuing to invest in rental property and the expectation of landlords is that they will hold on to their initial investments for quite a significant time period. There is continuing confidence in prospective house price growth and the rewards that can be achieved from capital gain on a property, as well as the rents achievable in the shorter term. All in all, the total returns achievable on a buy-to-let portfolio are an attractive prospect for investors.”
Recent high tenant demand has been pushing up rents, which have seen a 6.9 per cent increase over the last three months - resulting in higher yields. On average, respondents expected their portfolio to increase by a factor of three over the next ten years, indicating that they are confident that they will generate attractive rental incomes that can be re-invested in their portfolio for the longer term.
Heron concluded: “These small scale landlords are professionals from other sectors who are making considered choices about where to invest their money to maximise their returns - and they are choosing buy-to-let.”
