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The first quarter of 2018 saw the number of portfolio landlords (those with between six and 20 properties) increase from 35% to 39%, according to Paragon. Given last year's regulatory changes and increasing mortgage rates due to the expectation of a base rate rise, it's interesting that portfolio landlords' confidence doesn't seem to have been dented too much.
In contrast, the number of landlords with three to five properties decreased from 26% to 24% over the same period. At the same time, 26% of landlords expected to sell some or all of their buy-to-let property in the following quarter, up from 22% and the second increase in a row. The gap between those expecting to buy more properties and those looking to sell is now at its widest since 2009.
It's not a strict divide between those with few properties and those with many, however, as the number of landlords with more than 50 properties has also decreased, from 6% to 4%. As a result, the average portfolio size has gone down from 13.1 properties to 11.6.
"Our latest survey demonstrates how tax and regulatory changes are beginning to drive changes in landlord behaviour," said John Heron, managing director of Mortgages at Paragon, with landlords now spending an average of 30% of their income on mortgage costs, up from 26% at the end of 2017.
Downsizing their portfolios isn't the only method landlords are using to keep these costs in check, as 24% overall reported that they had increased rent in the last three months. Remortgaging to a lower loan-to-value deal is another way to save some money, and many seem to be adjusting their portfolios with this exact goal in mind, as the average loan-to-value ratio across landlords' portfolios was down from 35% to 32%.
Keep in mind that there will be more paperwork involved now; following September's regulatory changes, 80% reported an increase in documentation requirements and mortgage processing times. However, that shouldn't deter those who are looking to make the most out of their buy-to-let portfolio – time spent upfront could save a lot of money later down the line.
Have a look at the buy-to-let charts to find the most attractive rates currently available
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