Professional landlords are continuing to expand their portfolios despite higher borrowing costs, with the average Fleet Mortgages borrower now owning 18 investment properties.
That compares with 16 properties in the previous quarter and 12 a year ago, according to the lender’s Q3 Rental Barometer.
Larger landlords are also accounting for a growing proportion of business, with those owning 15 or more properties making up 30% of applications, compared with 23% a year earlier.
Two-thirds – 66% – of applications came from landlords with at least four properties, while the proportion from those owning between one and three fell to 24%.
YIELDS CLIMB
Average rental yields across England and Wales reached 7.9% during Q3, up from 7.5% a year earlier.
Yorkshire & Humberside topped Fleet’s regional table at 9.3%, up from 8.2%, followed by the North East at 9.2%.
Greater London remained the lowest-yielding region at 6.4%, despite commanding the highest average monthly rent at £2,597.
Only the North West and Wales recorded year-on-year falls in yields.
PURCHASES EASE
The expansion among larger landlords comes despite some signs of pressure on investment activity.
Purchases accounted for 34% of Fleet’s business during the quarter, down from 36% in Q2, while average rental cover at origination fell from 144% to 132%.
Steve Cox (main picture, inset), Chief Commercial Officer at Fleet Mortgages, says: “The average Fleet landlord now owns 18 investment properties compared with 12 a year ago, almost a third of our applications are coming from landlords with 15 or more properties, and two-thirds are from those owning at least four.
“That suggests professional landlords continue to grow their portfolios where the right opportunities present themselves, even if market conditions influence precisely when they decide to purchase or refinance.”
