A shift to professionalism

It often depends on the job they do and the working environment/culture they do it in. For some it comes down to qualifications, for others it’s how much experience they have gained. What I’m trying to say is that professionalism can mean many different things to many different people.

When it comes to the buy-to-let market, it’s fair to say that increased regulatory demands and recent tax changes have resulted in a far more professional approach from all types of landlords.

After operating in a somewhat subdued marketplace for the past 12–18 months, it’s evident that this increased professionalism has led to portfolios coming under greater scrutiny, with a number of ‘amateur’ landlords making the decision to leave the market.

However, at the higher end of the portfolio scale, many larger-scale landlords are continuing to make investments and looking for opportunities to grow their portfolios. According to Paragon’s latest PRS Trends Report for Q2 2019 – which tracks the experience of more than 200 seasoned landlords – such landlords now have an average of 13.1 properties. It added that landlords with between 11 and 20 properties have grown proportionally from 14% to 18%, with average portfolio values rising from £1.68m in Q1 2019 to an all-time high of £1.76m. It was also reported that there has been a sharp increase in those considering buying HMO property, up from just one in 20 (5%) to one in five (20%) – suggesting that landlords are looking to add higher yielding properties into their portfolios to offset some of the pressure from rising tax costs.

As highlighted in this report, professional landlords with larger portfolios continue to make up the backbone of the UK’s private rented sector and it’s encouraging to see many of them building on their property portfolios.

Lenders are also recognising shifting market dynamics and carefully assessing the needs of amateur and professional landlords alike to ensure they remain flexible enough to realign products and criteria to meet their needs. Following on from this point, it was interesting to see the latest Broker Beat Report from Masthaven Bank outline that nearly two in 10 of respondents (19%) believe that property development needs the most innovation in order to meet growing customer demand, alongside later life lending (18%) and buy-to-let products (15%).

Greater innovation can, and will, drive further growth in an array of specialist lending circles. Of course, lenders and service providers must remain responsible and highly professional when it comes to developing tools, products and services to facilitate this growth, but there are many positive signs they are doing just that. And long may this continue.