A survey by specialist buy-to-let lender Paragon Bank has found that strong tenant demand, an increasing population and rising house prices are driving ambitious landlords to build their property portfolios.

The lender surveyed 500 landlords who had up to three properties and ambitions to build larger portfolios.

And despite concerns over tax and regulation in the sector, the findings highlight a growing trend among landlords to actively increase their rental income and build long-term wealth.

The key findings in the report are:

• Six in ten landlords (60%) cited the ongoing demand for rental properties as a key factor in their decision to grow their portfolios.
• Over half of landlords (54%) are looking to add properties to their portfolios as a means of supplementing their retirement income.
• Nearly half of respondents (47%) believe that long-term house price growth is a significant driver for their investment decisions.
• And over a third of landlords (34%) prefer property as an investment asset over other options.

The rental market is set for continued growth, driven by projected population increases of around 10% over the next decade.”

Louisa Sedgwick, Paragon Bank‘s Managing Director of Mortgages, said: “The rental market is set for continued growth, driven by projected population increases of around 10% over the next decade. This favourable market outlook is underpinning the investment decisions of aspiring landlords.

“The research also demonstrates a clear focus on long-term planning, with over half of landlords building portfolios to support their retirement. This indicates a strong commitment to the rental sector and is essential for the overall health of the private rented market.”

When Paragon asked why landlords chose property over other investments, they emphasised its tangible nature (67%), wealth-building potential (54%), and the ability to pass it on as an inheritance (53%).

The lender is a subsidiary of the Paragon Banking Group PLC, lending to private individuals and limited companies and providing mortgages for single, self-contained properties, as well as HMOs and multi-unit blocks.