Landlords believe tenant demand is growing

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Rental demand:

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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