We only use cookies for website functionality and security.

Positive portfolio landlords eye capital raising to fund 2024 expansion intentions

Cover mockup (920px x 518px).jpg

Nearly four in 10 (37%) portfolio landlords, those with four or more properties, plan to increase the size of their portfolios in 2024, Paragon Bank research has found.

The majority of them will fund the purchases by releasing equity from other properties in their portfolio or using existing capital – 55% and 58% respectively.

The findings are included in Paragon’s new Portfolio Landlord Report 2024, issued today.

The survey, which polled nearly 400 4+ property landlords across the UK, found that 69% of those adding property are doing so as part of a portfolio expansion strategy, 60% are driven by long-term demand for rental property, and 50% are doing so as part of their retirement plan.

The survey also showed that 61% of landlords will buy with a mortgage and 39% will buy outright, and that 52% of landlords prefer to purchase terraced homes, 46% semi-detached homes and 26% individual flats.

Overall, 36% of portfolio landlords said they would maintain portfolios at current levels, with a fifth (21%) looking to reduce the size of their portfolio.

Richard Rowntree, Managing Director of Mortgages at Paragon Bank, said: "Portfolio landlords are optimistic about the future of the buy-to-let market and are looking to take advantage of the opportunities that arise in 2024. One of the ways they can do this is by remortgaging their existing properties, mortgaged or unencumbered, and releasing equity to fund new purchases. This can help them diversify their portfolios, increase their rental income, and secure their long-term financial goals."

He added: "We are committed to supporting portfolio landlords with a range of specialist products and services, including flexible and competitive remortgage options."

The survey also revealed that portfolio landlords target properties that offer higher yields, such as houses in multiple occupation (HMOs) or properties that can be converted to HMOs. According to the survey, 21% of portfolio landlords intend to purchase HMOs and 20% properties that can be converted to HMOs. HMOs are properties that are rented out to at least three households who share facilities such as a kitchen or bathroom.

Rowntree said: "Portfolio landlords are experienced and savvy investors who know how to maximise their returns by targeting properties that offer higher yields. HMOs are one of the most attractive options for portfolio landlords, as they can generate more income per property and reduce the risk of void periods. However, HMOs also require more management and compliance, which is why portfolio landlords need a specialist lender who can understand their needs and provide tailored solutions."

Download Paragon’s new Portfolio Landlord Report 2024 here.

For media enquiries contact:

Michael Clarke
Head of Media Relations
Paragon Bank

[email protected]

Notes to editors:

Paragon surveyed 390 landlords with four or more properties in December 2023.

Paragon lends to private individuals and limited companies and provides mortgages suitable for single, self-contained properties, as well as HMOs and multi-unit blocks. Paragon can accommodate higher aggregate lending limits and more complex letting arrangements including local authority leases and corporate leases along with standard ASTs.

Paragon Bank PLC is a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £14 billion of assets under management, helping more than 340,000 customers to achieve their ambitions.