Confidence boost for landlords

Landlords have reported increased confidence in Q3 2009, although the continuing mortgage drought combined with the proposed regulation of the buy-to-let sector pose some cause for concern.

According to the latest report on Private Rented Sector Trends compiled by specialist lender Paragon, most landlords expect the net value of their property portfolios to increase over the course of the next year.

They have taken advantage of falling property prices during the credit crunch: at the beginning of 2007, landlords owned an average of 11 investment properties, while today they own 12.

The report also revealed that a third of landlords think tenant demand will increase in the next 12 months, with 57% predicting it will remain stable.

The vast majority say they plan to retain their properties in Q4, with only 5.7 indicating plans to sell.

 However, over half of them tried to obtain a buy-to-let mortgage in Q3 2009, and of them nine out of 10 stated it was more difficult to get hold of a suitable deal.

Nigel Terrington, Paragon Group chief executive, said:

"A number of factors point to renewed landlord confidence in the third quarter of the year. Landlords expect the net value of their property portfolios to increase over the next 12 months, the first positive prediction for more than two years, and the Trends research shows that landlords not only retained existing properties during that period, they added to their portfolios."

"Landlords are reporting that tenant demand continues to be strong. This has been a recurrent theme throughout both 2008 and 2009 as people are either unwilling or unable to purchase property and decide to rent instead.

"It is unlikely that the mainstream mortgage market will recover for a number of years and vast sectors of the population, such as first-time buyers and people with impaired credit history, continue to be excluded from the market."