An upbeat trading statement from buy to let mortgage lender Paragon suggests that the sector is relatively healthy, but losing many of its small scale operators.
In the statement to shareholders Paragon says it’s commissioned research on the future of the sector with the Social Market Foundation. This exercise found that, contrary to some widely held beliefs, most people renting their home in the private rented sector are happy with both their property and their landlord, and value the flexibility renting offers to them.
The research also concluded that the attention of policy makers, the media and society more generally, focuses on the minority of private tenants who have had particularly bad experiences with renting. However, 81 per cent of private renters expressed their contentment with their current property, and 85 per cent said they were satisfied with their landlord.
In contrast to the wider mortgage market, new buy-to-let advances reported by UKF - at £53.3 billion for the year ended September 30 2022 - were actually 14.6 per cent higher than for the previous year. However, this was mostly driven by remortgage activity, which increased by 23.4 per cent while the value of new buy-to-let mortgages for house purchase fell by 10.6 per cent.
In the lettings market RICS’ September 2022 UK Residential Market Survey reported continuing strong tenant demand coupled with a dearth of supply, which was pushing rents upwards, with an expectation of a strong growth in rental prices in the short term. Research published by Zoopla supported these conclusions.
Paragon says this is borne out by its own independently commissioned research for the quarter ended September 30 which showed 65 per cent of landlords were experiencing increased tenant demand, with 39 per cent reporting significant increases. Rent rises were also reported.
The lender says this continuing demand will benefit affordability and cash flows for its landlord customers.
“Despite their positive view of the current situation, however, landlord confidence had declined significantly in the last quarter of the financial year across all metrics measured, covering their own business, the sector and the UK economy more generally” admits the company.
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They would say that wouldn't they ...
Although only a 'minority of renters' have a bad experience, most are currently suffering rent rises due to Govt policy & lobbying by tenant groups. As ever the few are making life much more difficult for the many :(
Never in the field of human suffering has so much been caused by so few to so many!
The big BTR landlords will make a killing when we have gone, wouldn’t want to be a tenant in the future 😬😬
I'm staying put to enjoy the higher rents which the corporates will make normal whilst continuing to provide a better personal service in more traditional properties which most tenants will prefer.
They will also lobby their Government pals to ensure landlords can control rogue tenants properly to the benefit of the majority of decent landlords and tenants.
In my view another poorly worded and half the story article. Does not matter whether you are a portfolio Landlord or have one or 2 properties. How you are mortgaged counts now.
If you have a fixed deal for the next 3 years or more then you'll carry on. If you are variable, like me, then you'll be selling. Clearly depends on the loan to value also.
A lot will depend on LTV, lenders criteria regarding tenant profile and ability to raise rents to go far enough towards the increased costs plus the extra impact of Section 24.
Remortgaging to a different lender is looking to be highly problematic on a great many properties with borrowing much over 50% LTV purely because the rent is too low. So we're stuck with our current lenders and just hope the product switch rates aren't too painful.
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