Paragon has reported that larger scale landlords are continuing to make targeted investments to optimise their position.

The lender’s latest quarterly survey, PRS Trends Report for Q2 2019, which tracks the experience of more than 200 seasoned landlords shows that landlords now have an average of 13.1 properties in their portfolio, up from 12.8 properties three months ago.

Underlying these headline figures, landlords with between 11 and 20 properties have grown as a proportion of the survey population from 14% to 18%. As a result, average portfolio values are getting higher – rising from £1.68 million in Q1 2019 to an all-time high of £1.76 million this time round.

According to Paragon’s latest survey, larger scale landlords are nearly three times as likely (11%) to be considering a property purchase in the next quarter than their smaller scale counterparts (4%).

There has been a sharp increase in those considering buying HMO property (House in Multiple Occupation) up from 5% to 20%.

Paragon says that not only is this indicative of higher experience levels amongst prospective buyers, it also suggests that landlords are looking to add higher yielding properties into their portfolios perhaps to offset some of the pressure from rising tax costs.

Despite the higher activity levels among larger scale landlords, overall landlord sentiment remains subdued with only 13% of landlords feeling optimistic about the future.

Landlords are unsurprisingly continuing to take steps to bolster their financial position with debt still barely over one third of average portfolio value and mortgage payments as a proportion of rent down from 27% to 25%.

John Heron, director of mortgages at Paragon, said: “Professional landlords with larger portfolios make up the backbone of the UK’s Private Rented Sector and it’s encouraging to see them continue to build their property portfolios.

“However, with a heightened interest in higher yielding property types and an increasingly prudent approach to financial management, it’s clear that landlords are proceeding cautiously as they seek to head off the twin challenge of higher tax and growing economic uncertainty.”