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Nearly a Third of Landlords Say Tenant Demand is Increasing

Survey indicates flats and maisonettes are the most popular property types buy-to-let investors are interested in

Landlord portfolios contain an average of 13.2 buy to let properties

Demand for housing in the private rented sector (PRS) is “growing or booming” according to the latest PRS report by specialist lender Paragon.

The panel of their latest survey for Q3 2019 was made up by over 200 experienced buy-to-let investors, 84% of which have been residential landlords for over a decade and nearly half (47%) for over 20 years.

Paragon’s findings reveal that landlords have an average portfolio of 13.2 properties, slightly above the previous quarter’s figure of 13.1 and the third consecutive quarterly rise.

However, those surveyed signalled they may be consolidating their portfolios in the near future, with landlord respondents expecting to have an average of 12.8 properties in 12 months’ time.

In addition, just 8% of landlords expect they will add to their portfolio over the next quarter, close to the survey’s historic low of 6% in Q4 2018.

In terms of property type, the majority of landlords this quarter (52%) indicated they would purchase a flat or maisonette, more than double the Q2 2019’s figure of 27%.

Almost a third (29%) claimed that tenant demand is either growing or booming, nearly the highest rate since Q4 2018 and reversing the notable drop in demand registered in Q1 2019 (21%).

John Heron, Paragon’s Director of Mortgages, commented: “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…and it is widely anticipated that this will lead to reduced choice and higher rents for tenants.”

Average monthly rents increased by 1.3% in the 12 months to August, according to the latest price index by the ONS.

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