Landlords believe tenant demand is growing
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Landlords believe tenant demand is growing

Tenant demand is ‘growing’ or ‘booming’, that’s according to landlords surveyed for the Paragon Mortgages Q3 2019 PRS Trends Report.

Nearly one-third of landlords (29%) believe that tenant demand is increasing, this is the highest proportion of landlords reporting this trend in the last 12 months.

John Heron, director of mortgages at Paragon, told Michael Lloyd of Mortgage Introducer:

“A clearer picture is starting to emerge of the impact that multiple government and regulatory interventions are having on the PRS.

“In broad terms, landlords have been buying fewer properties and selling more at a time when there has been a resurgence in tenant demand.

“RICS reported a similar trend in their August residential survey and it is widely anticipated that this will lead to reduced choice and higher rents for tenants.

“This is probably not the outcome that policy makers were looking for.”

Meanwhile, portfolio landlords (those owning several investment properties) continue to drive an increase in portfolio size and value, with the overall average portfolio now at 13 properties and worth £1.82m.

However, says Paragon, landlords are continuing to take a cautious approach to their investments.

Average gearing remains historically low at 33% LTV whilst mortgage payments as a proportion of rent remain unchanged in Q3 at 25%.

Despite more encouraging signs in portfolio size and value, Q3 saw landlord optimism decline to 11%.

This extends a long-term downward trend in optimism since the record high of 41% recorded in Q1 2014.

This was shortly before the government announced its plans to change the way landlords are taxed, increased stamp duty on second homes, and the EU referendum was held.

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