Allow Landlords to evict tenants where there are 14 days rent arrears14:34 PM, 1st October 2020
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The proportion of landlords who believe tenant demand is ‘growing or booming’ has increased to the highest level in almost a year, according to Paragon’s latest PRS Trends Report for Q3 2019
At 29%, the proportion of landlords saying tenant demand is growing or booming reverses a substantial drop in Q1 2019 (21%) and returns the indicator to the same level it’s roughly maintained since Q2 2017 (average 30%).
It also marks the first time that the proportion of landlords saying tenant demand is growing or booming has increased in consecutive quarters since Q4 2017.
Elsewhere in the report, portfolio landlords continue to drive an increase in portfolio size and value, with the overall average portfolio now at 13.2 properties and worth £1.82 million – the second consecutive, record average value.
However, the report reveals landlords continuing to take a cautious approach to their investments, with average gearing remaining historically low at 33% loan-to-value and mortgage payments as a proportion of rent unchanged in Q3 2019 at 25%.
Despite more encouraging signs in portfolio size and value in Q3 2019, landlord optimism remains historically low and now sits at 11%, down from 13% in the previous quarter. This extends what is now a long-term downward trend in optimism since the record high of 41%, recorded in Q1 2014, shortly before the government announced its plans to change the way landlords are taxed, increased stamp duty on second homes, and held the EU Referendum
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.”
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