Seven in 10 (70%) landlords are looking to buy a terraced house, suggesting that investors see more value in these smaller homes, a survey by The Deposit Protection Service has found.
Despite talk of property being less attractive in the current climate, three in five (60%) landlords may buy within the next two years.
One in five (21%) are thinking of buying in a different area from where they live.
Matt Trevett, managing director at The DPS, said: “The survey helps us gain insight into the purchasing intentions of landlords across England and Wales.
“The economic pressures that are affecting most sectors will inevitably also influence the strategies of buy-to-let property owners too, although it’s interesting to note that most landlords who intend to increase their portfolios are considering doing so over the next two years.
“Our regular surveys of both landlords and tenants mean we can share valuable insight with our customers and the wider industry and, combined with largest database of domestic private rental figures across the UK, help us reveal a detailed picture of trends in the private rental sector.”
Paul Fryers, managing director at Zephyr Homeloans, which helped organise the survey and is also part of the Computershare Group, said: “Financial pressures on landlords may mean they look further afield to buy property to suit their own budgets and to find the best rental yields.
“Although our buy-to-let customers invest in properties all over the UK, we have seen particularly high activity recently across East Anglia, the North West, the South East as well as Yorkshire and the Humber.”
Annual Rent Index report
The DPS conducted the survey to coincide with the launch of its new Annual Rent Index report, which shows that Yorkshire and Humberside had the most affordable rents last year.
Average monthly rents in the region were £614 by the end of the year (a £32 or 5.5% increase from £582 in 2021), which represented 24.7% of the average £2,460.08 monthly regional salary.
In contrast, average rent in the South East had reached £1,014 by the end of 2022: a £53 or 5.52% increase from £961 in 2021.
This represented 35.61% of the average regional monthly wage (£2,869.25), making the South East the least affordable region to rent outside London.
In London itself average monthly rents were £1,541 by the end of 2022: a £160 or 11.58% increase from 1,381 since 2021.
This figure represented 44.51% of the city’s average £3,487.92 monthly salary.
Region | Q4 2021-Q4 2022 Rent Increase (%) | Rents as proportion of average salaries |
Yorkshire and Humberside | 5.5 | 24.74% |
South East | 5.52 | 35.61% |
Wales | 5.93 | 26.84% |
East | 7.02 | 35.12% |
East Midlands | 7.03 | 27.32% |
South West | 7.19 | 34.50% |
West Midlands | 8.46 | 28.43% |
North West | 8.99 | 27.68% |
North East | 9.57 | 24.87% |
London | 11.58 | 44.51% |
Scotland | 12.02 | 26.70% |