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Landlords expect the net value of their property portfolios to increase over the next 12 months, the first positive prediction for more than two years.

The latest quarterly survey by Paragon Mortgages shows that landlords expect, on average, a 0.8% increase in the value of their buy-to-let portfolios over the coming year. This is the first positive increase, albeit slight, since the first quarter of 2007 and is the first glimmer of hope that landlords have had – they now believe house price falls have bottomed out.

The research also shows that landlords have been taking advantage of house price drops since the first quarter of 2007 to add to their portfolios – landlords owned an average of 11 properties at the beginning of 2007, which had increased to 12 properties by the third quarter of this year.

Paragon's research also reveals that the overwhelming majority of landlords plan to retain their investment properties into 2010. In total, 93% of landlords said that they had no plans to sell property during the period, with 14% stating that they intend to buy further investment property during the quarter.

John Heron, managing director of Paragon Mortgages says: "Interestingly, landlords have not generally seen falling house prices as the catalyst to sell property and have used weaker prices to add to their portfolios. Property investment is not a short-term game and professional landlords have a long-term view – they are prepared to ride-out fluctuations in house prices as the long-term performance of property versus other asset classes is excellent."

If you are thinking of building on your portfolio, talk to your buy-to-let specialist mortgage adviser about the loans on offer for you. A cheap property and high tenant demand means buy-to-let investment will surely see profits rolling in in 2010 and beyond.

SOURCE: Paragon, 13/10/09

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