Surge in family-focused letting
The types of property landlords are looking to invest in during the third quarter of the year are more suited to meet the needs of families moving into the private rented sector.
Of those landlords planning to purchase during the quarter, 41% were looking to invest in semi-detached houses and 22% were looking to buy a detached property.
The buy-to-let lender said it was a common perception that the private rented sector is largely made up of young people and couples. However the research showed that a significant proportion of landlords were letting to families and this looked set to increase during the coming months.
Paragon also said that with the increasing strain on the social housing sector, a constrained owner-occupier mortgage market and continuing wider economic difficulties, more families are looking to the private rented sector as their tenure of choice.
Nearly half of landlords involved in the research, 45% have families as tenants making them the fourth largest tenant type.
The remaining 55% let to young couples with 52% letting to professionals and 50% to young singles.
Nigel Terrington, chief executive of Paragon Group, said: “It is interesting to see more families relying on the private rented sector and this is certainly a trend which I expect to stay.
“Young couples and single person households will continue to account for a large proportion of the sector but I think over the next few years we will see more families making use of the flexibility and affordable accommodation that renting provides.
“With a rising UK population, which is set to grow from 62.3m today to 65m in 2016, landlords need to react quickly to a changing tenant demographic as otherwise demand will most certainly exceed supply quite considerably.”