Adding flats and semi-detached houses to rental property portfolios has increased in popularity amongst landlords, according to new research published by Paragon Mortgages.

Of those landlords surveyed in the lender’s quarterly PRS Trends Survey for Q3, 16% said they expect to increase the size of their portfolio in Q4. Professional landlords are more likely than their smaller-scale peers to purchase further rental property, 20% compared to 6%.

Terraced houses have remained a popular investment option. However, this quarter has seen the popularity of flats and maisonettes, semi-detached and detached houses rise to their highest level yet this year.

Types of property landlords plan to invest in during Q4:

• Flats/maisonettes – 58%
• Terraced houses – 58%
• Semi-detached houses – 30%
• Detached houses – 21%
• Bungalows – 9%
• Multi-unit blocks – 9%
• HMOs – 6%

“It is very encouraging to see private landlords looking to invest in a wider variety of property types,” said John Heron (pictured), managing director of Paragon Mortgages.

“This may well be in response to the fact that we are starting to see higher demand for larger rented properties from families who are choosing the private rented sector because they do not want to, or cannot buy in today’s difficult economic environment.

“This responsiveness of the PRS to changes in the shape of housing demand is one of the major strengths of the sector and it would be good to see policy makers work with private landlords to make more of this capability.”