55% of landlords describe the demand as stable and 39% believe it to be booming. Predictions for the future are equally optimistic, with 48% of landlords expecting demand to grow. These positive figures come from Paragon Mortgages who describe the market as making ‘significant strides in recovery’.
Thanks to such a strong demand, only 3% of landlords have experienced a decrease in rental income in the second quarter of 2014. The majority have seen their incomes remain the same during the period, but an encouraging 23% have seen income rise above 2%, and 3% of landlords above 10%.
Similarly, the average gross yield reported by landlords is also on the up. From 6.1% in the first quarter to 6.2% in the second, they have been reassuringly consistent over the past year. John Heron, the managing director of Paragon Mortgages, believes this figure will remain reliable, commenting that “In the next 12 months landlords expect this average gross yield to remain stable.”
In fact, now at an average of £1.6m, the value of a landlord’s property portfolio has also risen by 2%. The first quarter of the year was only producing average figures of £1.56m.
All this positive news means many landlords are looking to broaden their portfolios in the future, with almost 4 in 10 landlords stating their optimism about the prospects for their rental portfolios. This is a great change to early 2012 when optimism dropped to its lowest point. The figure has been growing since then.
“Our latest survey results show that landlords are feeling optimistic when it comes to the prospects for the market and their rental portfolios.” Sums up Heron.