According to recent research by Paragon Bank, 37% of portfolio landlords, managing four or more properties, express intentions to expand their portfolios in 2024. The primary means for funding these acquisitions will be through equity release from existing properties or utilizing available capital, as indicated by 55% and 58%, respectively.

The Portfolio Landlord Report 2024, a survey of close to 400 property landlords across the UK, underscores that 69% of those seeking to acquire additional properties are doing so as part of a broader portfolio expansion strategy. Meanwhile, 60% cite the enduring demand for rental properties, and 50% view it as integral to their retirement plan.

The survey discloses that 61% of landlords plan to utilize mortgages for new acquisitions, with the remaining 39% opting for outright purchases. Preferences in property type are notable, with 52% favoring terraced homes, 46% leaning towards semi-detached properties, and 26% expressing a preference for individual flats.

While 36% of portfolio landlords aim to maintain their current property holdings, 21% are contemplating reducing the size of their portfolios.

Richard Rowntree, Managing Director of Mortgages at Paragon Bank, comments on the findings: " 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.”

The survey also sheds light on the investment preferences of portfolio landlords, revealing a focus on properties with higher yields, such as Houses of Multiple Occupation (HMOs) or those suitable for conversion into HMOs. Approximately 21% of portfolio landlords plan to acquire HMOs, while 20% are eyeing properties ripe for conversion.

Rowntree emphasizes, " 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.”