The negative perception that landlords place profits above people has been challenged by new research from Paragon Bank, who report that ensuring properties are suitable for their preferred tenant type is the top priority for most landlords.
The research into landlord investment strategies, undertaken for Paragon’s Landlord Report 2022, found that when expanding portfolios, the top priority is ensuring that properties are suitable for their preferred tenant type, chosen by just over half, 51%, of the 621 landlords surveyed.
This is followed by familiarity with the local area, chosen by 48% of landlords, and close proximity to their own homes, a priority for four in 10.
Financial aspects of investments were less important to landlords. The potential for capital gains is prioritised by 37%, purchasing for high yields a primary strategy for 32% and low purchase price a key factor for 31% of landlords.
David, a landlord from County Durham, manages a 20-property portfolio with his wife Joanne. Commenting on the strategies the couple have utilised to build a successful lettings business, David said: “Living close to my portfolio means I can respond quickly to tenant requests for assistance. Buying in a town where I grew up also means that I know street by street where the good properties are, and which areas to avoid.”
David added: “I attend every letting viewing with the agent in order to meet all prospective tenants to discuss their needs, wants and background on the day.”
Richard Rowntree, Managing Director for Mortgages, said: “It’s interesting to see that considering how properties meet the needs of tenants is central to landlords’ investment strategy and more important than generating high yields or capital appreciation. This is perhaps at odds with the negative perception of landlords who are sometimes viewed as placing profits above people.
“Highlighting such misconceptions and helping people to better understand buy-to-let investors is what we’ve set out to do with our Landlord Report, something we hope will be valuable for brokers and others within the mortgage industry.”