The scrapping of Section 21: landlord responses

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Given that the Government appears to be rushing to scrap Section 21s possibly before the end of this year (and notwithstanding any change Boris Johnson might make to this if he becomes and stays as Prime Minister for any length of time)

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Government plans for deposit passporting

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More than 4 million people live in the private rented sector, yet when moving home, some tenants can find it a struggle to provide a second deposit to their new landlord, risking falling into debt or becoming trapped in their current home.

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Portfolio landlords now average 13 properties

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Portfolio Landlords:

Buy to let lender Paragon’s recent research shows that professional
and larger-scale landlords are still investing and are increasing the size of
their portfolios through more targeted investments.

With an average portfolio size for these types of landlords now
at 13.1 properties, their average size is up from 12.8 properties in just three
months. This puts the value of the average professional landlord’s portfolio at
£1.76m, the highest ever recorded.

This trend defies all the changes and ongoing pressures on buy-to-let
landlords, in an operating environment that has seen big changes to the taxation
rules and a big increase in the complexity and scope of the regulations
affecting the sector.

Paragon’s quarterly survey of the buy to let market shows
that these professional and larger scale landlords are roughly three times as
likely to be purchasing another buy to let in the next quarter than are smaller
scale landlords.

HMO (Houses in Multiple Occupation) purchases have also been
on the up. The number of landlords considering purchasing an HMO purchase is up
from 5% of landlords to 20% says Paragon.

Paragon’s reading of the evidence points to prospective buy
to let buyers generally having more experience of the industry, and with an eye
to improving the average income yields of their portfolios. This is a result of
trying to overcome the negatives of the tax rules.

The survey covered some 200 experienced landlords. It shows that
the number of landlords operating between 11 and 20 properties is beginning to
grow, now accounting for 18% of this sample, which Paragon claims is up from 14%
three months ago.

But, says Paragon, despite these findings, overall landlord
sentiment remains subdued with only 13% of the respondents feeling optimistic
about the future. Landlords are being cautious about their overall financial
position. Debt levels are down to just over one-third of the average portfolio value
says Paragon.

Director of Mortgages at Paragon, John Heron says:

“Professional landlords with larger portfolios make up the
backbone of the UK’s Private Rented Sector and it is encouraging to see them
continue to build their property portfolios.

“However, with a heightened interest in higher yielding
property types and an increasingly prudent approach to financial management, it
is clear that landlords are proceeding cautiously as they seek to head off the
twin challenge of higher tax and growing economic uncertainty.�

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