Semi-detached houses have overtaken terraced homes as the preferred property type landlords plan to buy, reflecting growing tenant demand for larger homes. 

Paragon Bank research of 800 landlords, undertaken by BVA BDRC, found that 14% of landlords plan to acquire new property during 2022. Of those looking to purchase new rental property, four in 10 intend to purchase semi-detached homes, with 39% seeking terraced houses.

Since the second quarter of last year, landlord intentions to purchase semi-detached houses has increased by six percentage points, highlighting the first time that the property type has been more popular than terraced homes since the question was first asked by BVA BDRC in 2017. 

This reflects the growing popularity of semi-detached houses since the start of the pandemic when 32% of landlords reported that they intend to purchase one in the next 12 months, a figure that has increased fairly consistently since.

Detached houses have also grown in popularity during the past two years. The proportion of landlords seeking this type of property has climbed from 9% in Q2 2019 to 18% in Q4 2021.

Other property types landlords said they intend to purchase during the course of the year include individual flats (17%) and Houses in Multiple Occupation (16%).

Richard Rowntree, Mortgages Managing Director for Paragon Bank said: “The pandemic has accelerated some of the trends we were already seeing in the profile of tenants, such as older tenants and more families, resulting in growing demand for semi-detached and detached homes. We have certainly seen a more recent trend for higher demand for larger homes due to a greater prevalence of home working, whilst we have also seen more families sell their home to relocate and renting before they buy.  

“We may also be seeing landlords anticipating the planned changes to Energy Performance rating of property and targeting homes that are either meeting the planned minimum EPC level of C or those that will be easier to upgrade than terraced homes. It will be interesting to see whether this trend continues in the coming months.”

The survey also found that the likelihood of being active in the property market increases in line with portfolio sizes, with 8% of single property landlords expecting to buy during the next year, increasing to 24% amongst those operating portfolio of 11 or more homes.

In terms of regions where landlords are planning to buy, the North West, South West and South East, excluding London, remain the most popular, with 18%, 17% and 15% of landlords planning to buy in these areas respectively.

Almost seven in 10 landlords (69%) plan to use buy-to-let finance to fund their next purchase, whilst 52% plan to do so within a Limited Company structure.

For further information contact:

Jordan Lott
Media Relations Manager
Paragon
Tel: 0121 712 2319

www.paragonbank.co.uk 

Notes to editors:

BVA BDRC surveyed 796 landlords during December 2021 on behalf of Paragon Bank.
 

Paragon lends to private individuals and limited companies and has 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 introduced its first product aimed at the professional property investor in 1995 and is a member of UK Finance, the Intermediary Mortgage Lenders Association (IMLA), National Landlords Association (NLA) and the Association of Residential Letting Agents (ARLA). 

Paragon Bank PLC 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 £13 billion of assets under management and manages over 450,000 customer accounts.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ.