Buy to let lender Paragon's recent research shows that professionaland larger-scale landlords are still investing and are increasing the size oftheir portfolios through more targeted investments.
With an average portfolio size for these types of landlords nowat 13.1 properties, their average size is up from 12.8 properties in just threemonths. This puts the value of the average professional landlord's portfolio at�1.76m, the highest ever recorded.
This trend defies all the changes and ongoing pressures on buy-to-letlandlords, in an operating environment that has seen big changes to the taxationrules and a big increase in the complexity and scope of the regulationsaffecting the sector.
Paragon's quarterly survey of the buy to let market showsthat these professional and larger scale landlords are roughly three times aslikely to be purchasing another buy to let in the next quarter than are smallerscale landlords.
HMO (Houses in Multiple Occupation) purchases have also beenon the up. The number of landlords considering purchasing an HMO purchase is upfrom 5% of landlords to 20% says Paragon.
Paragon's reading of the evidence points to prospective buyto let buyers generally having more experience of the industry, and with an eyeto improving the average income yields of their portfolios. This is a result oftrying to overcome the negatives of the tax rules.
The survey covered some 200 experienced landlords. It shows thatthe number of landlords operating between 11 and 20 properties is beginning togrow, now accounting for 18% of this sample, which Paragon claims is up from 14%three months ago.
But, says Paragon, despite these findings, overall landlordsentiment remains subdued with only 13% of the respondents feeling optimisticabout the future. Landlords are being cautious about their overall financialposition. Debt levels are down to just over one-third of the average portfolio valuesays Paragon.
Director of Mortgages at Paragon, John Heron says:
'Professional landlords with larger portfolios make up thebackbone of the UK's Private Rented Sector and it is encouraging to see themcontinue to build their property portfolios.
'However, with a heightened interest in higher yieldingproperty types and an increasingly prudent approach to financial management, itis clear that landlords are proceeding cautiously as they seek to head off thetwin challenge of higher tax and growing economic uncertainty.'�