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Nearly two-fifths (37%) of portfolio landlords – those with four or more properties – plan to increase the size of their portfolios in 2024, Paragon Bank research has found.

The majority will fund the purchases by releasing equity from other properties in their portfolio or using existing capital – 55% and 58% respectively.

Paragon’s Portfolio Landlord Report 2024 polled nearly 400 property landlords across the UK, and found that 69% of those adding property were doing so as part of a portfolio expansion strategy, 60% were driven by long-term demand for rental property, and 50% were doing so as part of their retirement plan.

The survey also showed that 61% of landlords planned to buy with a mortgage and 39% would buy outright; 52% preferred terraced homes, 46% semi-detached homes and 26% individual flats.

Overall, 36% of portfolio landlords said they would maintain their portfolios at current levels, with a fifth (21%) looking to reduce the size of their portfolio.

Richard Rowntree (pictured), managing director of mortgages at Paragon Bank, said: “Portfolio landlords are optimistic about the future of the buy-to-let market and are looking to take advantage of the opportunities that arise in 2024.

“One of the ways they can do this is by remortgaging their existing properties, mortgaged or unencumbered, and releasing equity to fund new purchases.

“This can help them diversify their portfolios, increase their rental income, and secure their long-term financial goals.”

He added: “We are committed to supporting portfolio landlords with a range of specialist products and services, including flexible and competitive remortgage options.”

The survey also revealed that portfolio landlords target properties that offer higher yields, such as houses in multiple occupation (HMOs) or properties that can be converted to HMOs.

According to the survey, 21% of portfolio landlords intend to purchase HMOs and 20% properties that can be converted to HMOs.

HMOs are properties that are rented out to at least three households who share facilities such as a kitchen or bathroom.

Rowntree said: “Portfolio landlords are experienced and savvy investors who know how to maximise their returns by targeting properties that offer higher yields.

“HMOs are one of the most attractive options for portfolio landlords, as they can generate more income per property and reduce the risk of void periods.

“However, HMOs also require more management and compliance, which is why portfolio landlords need a specialist lender who can understand their needs and provide tailored solutions.”

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