Landlord action to mitigate higher tax costs will lead to a lower level of buy-to-let remortgage transactions going forward, according to Paragon’s PRS Trends Report for Q1 2019.

Paragon’s latest quarterly survey, which tracks the experience of more than 200 landlords with an average of 12.8 properties and over 20 years’ experience in the UK’s Private Rented Sector (PRS), shows that while landlords in this group remain engaged in the sector, they are now prioritising measures to bolster financial strength over portfolio expansion.

Specifically, the survey shows how landlords have scaled back their buying intentions, reduced their reliance on mortgage debt and improved affordability by spending less of their rental income on mortgage payments.

For example, the proportion of landlords looking to purchase property has fallen from 15-20% before the announcement of tax and regulatory changes in 2015, to just 7-10% today.

Average portfolio gearing has fallen from 40% in 2014 to 33% today, with landlords who have three or more properties borrowing 36% of their portfolio value on average.

Meanwhile mortgage costs as a proportion of rental income are down from 30% at the beginning of 2017 to 27%, also aided by landlords re-mortgaging onto lower interest rate and longer-term fixed mortgage deals.