Promising signs are emerging for landlords who have recently seen a sluggish demand from tenants for private rented accommodation.
According to a press release from bank Paragon, landlords are now experiencing a boom in demand – for the first consecutive quarter since the end of 2017.
A 29% increase in the number of landlords expressing such enthusiasm is a marked reversal of the pessimistic outlook in evidence at the beginning of this year.
The perceived increase in demand also coincides with landlords moving towards generally larger property portfolios which are commensurately higher in value. The average size of a landlord’s portfolio now stands at 13.2 properties which are together worth some £1.82 million. This marks the second record average value in a row.
Despite these stirrings of hope and enthusiasm, landlords are less and less positive about the future of the private rented market. Whereas 41% of them expressed optimism in the first quarter of 2014, that proportion has now slumped to just 11% – confirming a steadily downward trend.
This might help to explain the generally conservative approach most landlords seem to be taking towards investing in buy to let property. Buy to let mortgages, for example, are typically arranged at a loan to value (LTV) ratio of just 33%, while the level of mortgage repayments remains at an average of 25% of rental income.
Although there has been some resurgence in demand from would-be tenants, landlords are still selling more properties than they are buying says the study – with the blame largely placed on increasing government intervention and more regulation.