One of the biggest changes in buyer behaviour during the course of the pandemic and subsequent lockdowns was the shift towards larger properties and, in particular, for those that offered greater outdoor space.
A trend that has not been lost on UK landlords it seems as demand for larger rental property amongst tenants has seen semi-detached houses overtake terraced homes as the preferred property type landlords plan to buy.
Paragon Bank research of 800 landlords, undertaken by BVA BDRC, found that 14% of landlords plan to acquire new property during 2022. Of those looking to purchase a new rental property, four in 10 intend to purchase semi-detached homes, with 39% seeking terraced houses.
Since the second quarter of last year, landlord intentions to purchase semi-detached houses has increased by six percentage points, highlighting the first time that the property type has been more popular than terraced homes since the question was first asked by BVA BDRC in 2017.
This reflects the growing popularity of semi-detached houses since the start of the pandemic when 32% of landlords reported that they intend to purchase one in the next 12 months, a figure that has increased fairly consistently since.
Detached houses have also grown in popularity during the past two years. The proportion of landlords seeking this type of property has climbed from 9% in Q2 2019 to 18% in Q4 2021.
In terms of regions where landlords are planning to buy, the North West, South West and South East, excluding London, remain the most popular, with 18%, 17% and 15% of landlords planning to buy in these areas respectively.
Almost seven in 10 landlords (69%) plan to use buy-to-let finance to fund their next purchase, whilst 52% plan to do so within a Limited Company structure.
Richard Rowntree, Mortgages Managing Director for Paragon Bank, said: “The pandemic has accelerated some of the trends we were already seeing in the profile of tenants, such as older tenants and more families, resulting in growing demand for semi-detached and detached homes. We have certainly seen a more recent trend for higher demand for larger homes due to a greater prevalence of home working, whilst we have also seen more families sell their homes to relocate and renting before they buy.
“We may also be seeing landlords anticipating the planned changes to Energy Performance rating of property and targeting homes that are either meeting the planned minimum EPC level of C or those that will be easier to upgrade than terraced homes. It will be interesting to see whether this trend continues in the coming months.”