The proportion of landlords to hold that view was the largest in almost a year and had grown in consecutive quarters for the first time since Q2 2017.
However, the amount of landlords reporting that tenant demand was stable, growing or booming had dropped to 81 per cent, down from 86 per cent in the last quarter.
The report noted that portfolio sizes are on the rise. The average landlord had 13.2 properties in their portfolio, up slightly from the 13.1 in the last quarter. This is the third straight quarter in which the average has risen.
Despite this, the report suggests there is caution among landlords over expanding further, with respondents expecting to have an average of 12.8 properties in a year’s time.
This conservative approach is coming through on financing too, with average portfolio gearing having fallen from above 40 per cent five years ago to just 33 per cent today.
Overall landlord optimism has dropped still further from the 13 per cent recorded last time around to just 11 per cent.
John Heron (pictured), director of mortgages at Paragon, said that a clear picture was emerging of the impact of various government and regulatory “interventions” were having on the private rented sector.
He continued: “Landlords have been buying fewer properties and selling more at a time when there has been a resurgence in tenant demand. The Royal Institution of Chartered Surveyors reported a similar trend in its August survey. It’s widely anticipated that this will lead to reduced choice and higher rents for tenants. This is probably not the outcome that policy makers were looking for.”