Immigrants power buy-to-let sector
An influx of people from overseas is creating a thriving buy-to-let sector, as Sam Cutbush discovers
Almost half of all landlords expect rental demand from immigrants will increase over the next few years, according to Paragon Mortgages’ latest Buy-to-Let Trends survey.
Respondents have a current average of 3.5 non-British tenants. Professional landlords have the greatest involvement with non-British tenants, with an average of 4.4. This is in comparison to the small-scale landlord who has an average of 0.5 non-British tenants.
Landlords have seen rental demands from immigrants steadily increase over the past five years. Professional landlords in particular have seen a rise in demand from immigrants, with 40% reporting an increase, compared with 27% of small-scale landlords.
John Heron, managing director of Paragon Mortgages, said: “On the whole landlords are optimistic tenant demand will continue to rise over the next few years, and inward migration is a key contributory factor. Over the past decade migration into the UK has increased from 314,000 in 1994 to 582,000 in 2004, and with further EU enlargement on the agenda, it is likely to increase even further.”
Landlords see migrant tenants as typically representing a stable, long-term customer base. One in three migrants plan to stay for between one and three years, with 15% planning to stay permanently. Only one in eight migrants is expected to stay for less than a year.
John Heron continues: “Individuals coming to the UK represent an increasingly reliable source of rental income for landlords and an important element in future rental demand.”
In terms of future changes in rental demand, 47% of respondents said they expect to see demand from immigrants increasing over the next few years, with 23% of professional landlords expecting to see a significant increase in demand.