Fewer landlords looking to sell but investment appetite remains low

The number of landlords looking to sell properties decreased slightly between Q2 and Q3 2019, according to a survey by Paragon.

The specialist lender's latest PRS Trends Report reveals that 22% of landlords were expecting to sell property last quarter, down from 23% in Q2.

Despite this dip in landlords looking to sell, the appetite for further investment in buy-to-let remained low at 8% between July and September.

This is close to the historic low of 6% recorded in Q4 2018 and remains well below the 15-20% maintained between 2010 and 2015.

The disparity between landlords expecting to buy compared with those looking to sell sits at 15%. Paragon says this gap has continued to widen since the two were at exactly the same level in Q3 2014.

The analysis reveals a split between non-portfolio and portfolio landlords (those with four or more mortgaged properties).

Between Q2 and Q3, the proportion of non-portfolio landlords looking to expand their portfolios dipped from 4% to 1%, while 10% of portfolio landlords said they are looking to make 'strategic investments' to strengthen their financial position.

The survey, which spoke to over 200 landlords, also looked into landlords' habits when it comes to mortgage borrowing. Some 57% of those taking part said they are likely to source their next mortgage using the same broker, while 41% said they expect to go straight to a lender.

Meanwhile, 16% said they'd be likely to consider an online mortgage broker and 10% said they are likely to switch brokers.

"With so much change in the PRS in recent years, landlords have had to adapt quickly to higher taxation which has impacted returns on their portfolios," says Paragon’s outgoing director of mortgages, John Heron.

"Throughout that time, landlords will have relied more heavily than ever on intermediaries to help them get the very best deals available."

"It’s surprising to hear that some landlords are considering approaching a lender directly for their next mortgage."

"This does not match well with the actual behaviour of landlords particularly in the portfolio segment where 9 out of 10 landlords use an intermediary."