The survey revealed property prices paid by landlords dropped by 1.5 per cent in March, from £163,417, to £161,309. However values were 5.5 per cent higher than the findings from March 2005.
Paragon revealed the BTL market was thriving due to continued tenant demand for properties at the lower end of the scale, with a surge in activity from small-scale property investors helping sustain growth.
Announcing the findings John Heron, managing director at Paragon Mortgages, said: “Since November, property values had been rising steadily, but this month saw an easing in prices paid. This reflects the fact that tenant demand is strongest for smaller homes, as ‘singletons’ and young couples look for clean, simple rental properties to fill their accommodation needs. As serious investors buy in response to actual tenant demand, average prices paid have eased a little.”
Heron added that he expected the BTL market to continue to grow over the coming months. He said: “We have identified a significant upsurge in landlords’ confidence and activity over the past three months or so. They are actively growing their portfolios and, in our landlord survey, they tell us that over the next 12 months they plan to increase their property holdings by around 6 per cent, on the back of growing tenant demand and an expectation that rents will rise.”
Rod Murdison, proprietor at Murdison & Browning, agreed the BTL market had grown, and said: “People who have experience in the market remain the most confident but there have been a few who have entered the market as they have come into some money.” He added another driver for increased BTL activity was the pensions crisis, with people thinking of ways to increase their income when they retire.
