In its 2018 report, the ministry for housing, communities and local government committee highlighted the government’s intention to professionalise the private rented sector, ‘strengthen consumer protection and tackle “rogue” landlords.’

While I’m sure few would disagree that in the current climate protecting tenants is more important than ever, I feel the portrayal of landlords can be inaccurate. Like any industry, the PRS does have those who don’t always do things by the book, but I believe these are the exception rather than the norm.

What isn’t so widely reported is the evidence suggesting that standards in the sector have improved, correlating with the increase in buy-to-let investment.

The English Housing Survey, also published in 2018, concluded that the proportion of non-decent homes has declined over the last decade across all tenures. In the case of the PRS, which expanded significantly during this time, this was supported by newer stock; between 1996 and 2018 the proportion of homes built after 1980 increased in the PRS more than other tenures.

The PRS has also been a key component in the drive towards more environmentally sustainable housing. Between 2008 and 2018, the average energy efficiency rating of privately rented dwellings increased more than any other tenure.

Since then, it has become a requirement for all rented properties to have an energy performance certificate rating of E. Findings from our own research shows that just under half of landlords intend to make energy efficiency improvements to their properties as part of the government’s green homes grant scheme.

Of course, further improvements are required across all housing tenures, but the strides that have been made are positive for tenants.

When asked how they feel about renting, Paragon research showed over half of tenants were classified as ‘contented renters’ after responding that they either really enjoy renting or that it suits their current situation. Over two thirds also stated that they have a positive working relationship with their landlord.

It seems that there is data to support the idea that government policy has been successful and these improvements correlate with the sector becoming more professional.

Analysis of landlord survey responses shows that at the start of 2015, 26 per cent of landlords were full-time and this has risen to 34 per cent in Q3 of 2020. Figures stretching back to 2007 also show that landlord profitability has steadily increased as the PRS becomes more concentrated towards professional landlords.

Looking at our own book, we see the number of completions through limited companies grow year on year since 2015. It could be argued that this primarily for tax purposes, but incorporation seems more suited to those able to use their larger portfolios as leverage while keeping mortgage debt to a relative minimum.

Landlords with eleven or more properties are significantly more likely than smaller landlords to intend to buy their next BTL property as a limited company – 76 per cent compared to 40 per cent.

With evidence suggesting that professionalisation of the sector is improving standards what has been the impact of Covid-19 and has it accelerated this?

As you would expect, the more properties a landlord has, the more chance there is that they have experienced issues with rents as a result of Covid-19; our most recent survey of landlords found that those with one property have had rental income affected in a 30 per cent of cases whereas 66 per cent of professional landlords with over 20 properties have encountered rental income problems.

Despite this, professional landlords are the most upbeat and likely to rate various aspects of their business expectations as ‘good’ or ‘very good’.

It’s difficult to say why this is but I imagine that professional landlords have built their larger portfolios over time so have encountered other shocks to the system. Although expected economic scarring is likely to be long term, they are accustomed to the cyclical nature of the industry so have more confidence that an upturn will follow the challenge of 2020. Larger portfolio landlords are able to absorb some losses into their portfolios, dust themselves off and move forward.

With all their letting eggs in one basket, this is not so easy to do for smaller-scale landlords.

Just under a quarter of single property landlords say they are likely to exit the PRS as a result of the pandemic. This drops to less than one in twenty amongst landlords with twenty or more properties. As a result, smaller landlords who are remaining in the market are more likely to sell their properties in the next 12 months when compared to larger portfolio landlords and six times less likely to invest.

There are anecdotes of cash rich new entrants moving into the BTL market for the first time, looking to take advantage of the stamp duty break, low interest rates and demand for holiday lets resulting from the rise in staycations.

Limited data exists to show if this will be enough of an influx to replace any amateurs exiting the market, but it does suggest that there is no shortage of people who see BTL as a viable investment, recognising the sector’s place in addressing the housing shortage.

Richard Rowntree, managing director for mortgages, Paragon