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Almost a third of landlords report a rise in tenant demand

There was an increase in the number of landlords reporting growth in tenant demand in the third quarter of the year.

Paragon’s latest PRS Trends Report for Q3 2019 found that 29% of all landlords witnessed an increase in demand from tenants in the last quarter, which is the highest proportion in almost a year and the first consecutive quarter of growth since Q4 2017. 

The research also revealed that portfolio landlords continue to drive an increase in portfolio size and value, with the overall average portfolio now at 13.2 properties and worth £1.82m – the second consecutive, record average value.


But despite a more optimistic demand outlook, many landlords continue to adopt 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%.

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, 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. 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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Poll: Do you agree that there has been a recent resurgence in tenant demand?


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    Fewer properties but not fewer tenants means higher demand means higher rents. Grateful thanks to SNP, Shelter etc. - the Landlords' friends.

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    • 20 September 2019 09:11 AM

    Was at an NLA meeting last night.
    Apparently the percentage of remortgages with the NLA mortgages is now 65% of business.
    It used to be new mortgage business.
    Which means far fewer LL are investing with mortgages.
    At some point all the remortgages will be done at least for 5 years as most of them are 5 year deals.
    What will mortgage brokers do then!?
    It seems the PRS is in terminal decline or rather the mortgaged PRS is.
    I wonder why when tenant demand is exponentially increasing?
    It is almost as though LL are becoming fed up with the attacks on the PRS which is deterring them from investing................,...........I wonder!!?


    Yep your right Landlords are not liked by their customers and Landlords dont like their customers, boads well


    David you are just so wrong, I get on well with all my tenants and they get on well with me, but stop paying the rent and things do change and very quickly

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    I was at a large Auction yesterday 270 lots, Hard Rock Hotel or was it between a rock & a hard Place. Landlords trying to get out and taking a big hit some selling at guide price or below where as a few years ago I knew I had to add 25 to 30% to guide price as a yard stick to get a realistic value, haven't bought in recent years due to adverse regulations although have bought at Auctions as far back as 1972/73. It is very clear to me the Government don't want us and have gone out of their way to destroy, they want us replaced by Institutions many of whom we as tax payers are subsidizing for sure. I wrote to my M.P. last year saying those policy's were going to collapse the market but fell on deaf ears and referred me to English Housing Survey take that with a pinch of salt. OK anyone still in doubt how much the Government wants us out I refer you to all the adverse changes in recent years not least the one coming on 12th of October 2019, namely Section 21 abolition, notwithstanding current Consultation where the decision is made prior to Consultation it must be Democracy in full swing, but we can belly ache all we want until 12th-10-19, then it goes. So I might reflect on the damage, work load, costs, penalties,restriction they have imposed on us ?
    HMO's only for one half of community, Section 24, Section 21, Article 4, Deposit scandal, Tax hikes, Stamp Duty, "How to Rent" as if they didn't know how to Rent with their i Phones, Taking away our 10% Wear & Tear allowance which was their as long as letting it self, "Right to rent"immigration checks Customs job, Deregulation Act by Shelter to cover the tenant for any damage they might do & avoid Eviction, Claw back rules to get Rent back that was paid to you while some benefit false claimant lived in your property, Confiscation Orders, Banning Orders , incidentally we pay for all, All, All, do you still thing that Gov' loves us ?

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    • 20 September 2019 14:02 PM

    Things must be desperate for some LL if they are having to resort to auction.
    That is very worrying.
    Or perhaps S24 is such an overriding imperative that LL are using Auction as the quickest route to getting rid of what are now millstones round the neck rather than profitable rental properties they were prior to the introduction of S24.
    I honestly don't believe tenants have any idea as to what is to hit them.
    The days of plenty with rental stock are over.
    Tenant choice will be rapidly reduced to the extent that they won't have much choice.
    They will need to take what is available immediately it becomes so and that is only if they are acceptable to the LL.
    The dross tenants will struggle to source LL willing to take them on.
    But none of this will concern LL who have managed to escape.
    I believe once BrExit is done and things settle down a lot more LL will sell in calmer markets.

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    I am very sorry to say there is no such thing of any Landlord managing to escape this one regardless of our situation or financial position it will be on Statute, when Section 21 is gone so is any confidence we had left in providing quality housing to the Private Sector Housing anymore. They want us out plain & simple or complicated it doesn't matter to them, we are just an irritation to them.
    It seems we are heading back to the 1960's again & along way on route all ready with Licensing Schemes forcing people to live in rooms with cooking and washing facilities in rooms just like 1960's bedsits, living ,cooking, washing and sleeping in the same room. I don't rate this as driving up Standards more like importing third World ideas.

    • 20 September 2019 16:15 PM

    If or I suppose when S21 is abolished surely LL will be able to recover possession of their property by citing relevant grounds!?
    Rent arrears will still be mandatory grounds for eviction.

    I accept that the S8 process even with alleged Govt changes coming to it will still be a costly and protracted affair.
    My last RGI EVICTION was carried out by the RGI solicitors using S8.
    Yep still took 10 months but that was only because I gave the tenant 85 days to pay the arrears.
    Which she never did so I submitted the RGI claim the following day.
    So it might have taken 7 months.
    Still a long time to go without rent and would have bankrupted me but for credit cards!
    This as it still takes time for RGI to pay out.
    With a new S8 process and courts being overloaded with cases I reckon S8 until bailiff eviction could take 1 year.
    So LL need to factor this into their business model.
    I certainly can't afford to risk taking on tenants without RGI and because so few tenants qualify I am getting out of AST letting.
    I am not prepared to risk bankruptcy because of 1 rent defaulting tenant.
    It is rare that LL can source tenants who could qualify for RGI.
    With such poor tenant circumstances it is just too risky letting to tenants without RGI in place.
    I am not prepared to be held a hostage to fortune by some rent defaulting tenant so I have little alternative than to withdraw from the AST lettings market.
    LL can escape the PRS but it would be better to do so while S21 exists.
    This probably accounts for why some LL are selling up.
    Without the confidence of being able to repossess a property at anytime which S21 currently facilitates then many LL will throw in the towel as I am doing.
    Unencumbered LL can get by but those with mortgages need RGI on their tenants or face massive financial risks


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