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Landlords believe tenant demand is growing

Michael Lloyd

September 19, 2019

BTL

An increasing number of landlords believe that tenant demand is ‘growing’ or ‘booming’ according to the Q3 2019 PRS Trends Report.

Almost a third (29%) believe that tenant demand is increasing which is the highest proportion of landlords with this viewpoint for almost a year.

John Heron, director of mortgages at Paragon, said: “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.”

Portfolio landlords continue to drive an increase in portfolio size and value, with the overall average portfolio now at 13 properties and worth £1.82m.

However, landlords are reportedly 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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