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Landlords buy in cities, bucking the Covid countryside craze

Coronavirus has prompted much talk of landlords and tenants alike fleeing cities for the country - but some evidence suggests that may not be borne out in reality. 

Nearly seven out of 10 landlords will continue to target property in urban areas for their next portfolio purchase, Paragon Bank research has found.

Paragon’s research of 846 landlords, conducted by BVA BDRC, found that 16 per cent plan to buy an average of 2.2 properties in the next 12 months. 

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Of those looking to purchase, 68 per cent are looking at buying in urban areas, despite the Coronavirus countryside craze.

Over a third plan to buy in a suburban area and only six per cent are looking at rural locations. 

Two thirds of landlords said they plan to buy in the same area as their existing properties, with 10 per cent targeting new areas. 

Richard Rowntree, Paragon’s managing director for mortgages, says: “This research supports a notion that we have put forward throughout the pandemic; while we need to be able to adapt to changing market conditions, something that the industry has done well, it is also important to look at the bigger picture. In doing this, we see that despite significant shocks to the system, the fundamental principles underpinning the private rented sector remain.

“While we have seen some move out of urban areas, this isn’t possible or desirable for everyone. The successful landlords will be the ones who invest with the intention of meeting the diverse demand for good quality, affordable housing.”

Reflecting this strategy for investment in more densely populated areas, terraced houses were cited as the property type that half of landlords plan on purchasing. 

Semi-detached houses was the next most popular type - the target of 37 per cent of planned purchases - and flats were the third most popular property purchase type at 26 per cent.

Landlords were also asked what key attributes they will be looking for in any new investment properties. 

Potential for rental yield was the most important aspect, chosen by 77 per cent of landlords, followed by the potential for adding value which was a key attribute for 59 per cent.

 

Making up the top five most important property characteristics were the proximity to public transport, suitability for couples and suitability for families.

Attributes that some say have risen in prominence as a result of the Covid-19 pandemic were less of a priority for landlords. 

Suitability for home working was selected by 27 per cent of landlords and proximity to green space was near the bottom of the list after being picked by 17 per cent of those who plan to invest in the next 12 months.

Richard Rowntree concludes: “These figures show that landlords continue to display a considered, careful approach to property investment, looking at long-term trends rather than short-term sentiment.”

  • Fredy Jones

    How long does it take to evict long term non paying tenants now? Is it possible to get an accelerated case before May deadline when breathing space law comes in? If the tenants were not paying before cv19 they should be ahead in the backlog when the courts reopen?

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