A new analysis claims landlords are now buying lower value properties, driven by desires to minimise tax threats.

The analysis by Inventory Base suggests that in Q2 2024 – the latest available data – the average landlord’s portfolio size stood at 7.6 properties, marking a +5.6% increase on Q1 2024’s average size of 7.2 properties.

But the average value of individual properties within these portfolios has fallen over the same period of time.

In Q1, the average property value was £250,000, but by Q2 this had fallen by -10.5% to stand at £223,684.

So while portfolios have actually been increasing in size, their overall value has gone down. In Q1, the average landlord’s portfolio was valued at £1.8m, but by Q2 this had fallen by -5.6% to stand at £1.7m.

Despite this decline in overall value, increased portfolio sizes are matching with rising rent values to mean landlords are still managing to increase their rental income.

As a result of this increase, landlords’ decision to grow and diversify their portfolios has resulted in them achieving greater yields.

In Q1 2024, the average rental yield stood at 6.1%, while in Q2 it was +0.2% higher at an average of 6.3%.