Paragon Bank

Landlords prioritise tenant needs over profits when purchasing BTL properties

A majority of landlords prioritise a property’s suitability for their preferred tenant type over profits when it comes to expanding their BTL portfolios, revealed the latest research from Paragon Bank.

Of the 621 landlords surveyed for the lender’s Landlord Report 2022, 51% claimed that ensuring the property is satisfactory for their preferred tenant type was the top priority.

This was followed by familiarity with the local area (chosen by 48% of landlords) and close proximity to their own homes (quoted by 40%).

Financial aspects of investments were less important to landlords, as only 37% prioritise the potential for capital gains, 32% focus primarily on the high yield of the property, and 31% see the low purchase price as a key factor.

Richard Rowntree, managing director for mortgages at Paragon Bank, 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 BTL 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.”

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