Landlords investing in property at the moment believe the UK’s cities will return to normal after the pandemic is over, and are ignoring claims that semi-rural suburbia is where home-working renters will want to live in the future.
Lender Paragon says it has found that landlords continue to target urban locations for buy-to-let purchases; 16% of landlords plan to buy an average of 2.2 properties in the next 12 months, with 68% looking at buying in urban areas.
Suitability for home working was only named by 27% of landlords as important, while proximity to green space was picked by 17% of those who plan to invest in the next year.
Paragon’s study of 846 landlords found that more than a third (36%) plan to buy in a suburban area and 6% are looking at rural locations. Two thirds (66%) of landlords are going to buy in the same area as their existing properties, with 10% targeting new areas, and 20% planning a mixture of both.
MD Richard Rowntree (pictured) says that while investors need to be able to adapt to changing market conditions, it’s also important to look at the bigger picture.
He adds: “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.”
When deciding what to buy, terraced houses were cited as most popular, followed by semi-detached houses. Potential for rental yield is the most important aspect, according to most landlords, followed by the ability to add value.