Despite a high inflationary environment, portfolio landlords – those with five or more rental properties – continued to expand their property portfolios, research from Shawbrook has found.
According to the survey of more than 1,000 residential landlords, 88% of portfolio landlords added to their portfolios in the past six months, with 25% intending to invest further within the next year.
This is compared with smaller landlords – those with between one and four rental properties – where just 58% added to their portfolio in the past six months.
Two-fifths (39%) of those looking to add at least one property to their portfolio planned to diversify by location, while 37% were actively exploring different types of residential property.
In addition, 26% of portfolio landlords were turning their attention towards student housing, and 21% were looking at the retirement housing market.
Demand for rental homes was found to be 51% above the 5-year average, and the number of available homes was 30% below average in September 2023.
Among those diversifying their property portfolios, 33% had done so to respond to tenant demand, while 28% wanted to prioritise more energy efficient buildings.
Of the 88% planning to add at least one property to their portfolio, 36% wanted to capitalise on good deals currently in the market, with 35% already having capital ready to invest.
Emma Cox, managing director of real estate at Shawbrook, said: “Whilst the property market remains challenging, it’s encouraging to see professional landlords continuing to invest and seek opportunities to diversify.
“Our research has shown that a significant number of landlords have taken proactive steps to expand their portfolios, while responding to demand to add quality, energy efficient rental stock to the market for renters.”
“Looking ahead, it will be important for buy to let landlords to explore external financing options and lean on specialist lenders.
“To continue meeting buyer needs in a sustainable way, astute landlords will need to keep thinking one step ahead, adapting their strategies to adjust to the rapidly changing real estate landscape.”
