Landlord confidence has improved across all metrics year-on-year, with many feeling positive about the chance for capital gains on their properties and the private rental sector.
The BVA BDRC Landlord Panel research report, which interviewed 398 landlords online during December, found landlord confidence in their own lettings business remained stable, with rental yields the only metric of the five to dip from Q3 to Q4 2023.
While a fall in rental yield confidence was also discovered, the research suggested that this stemmed from a perception that tenant demand has decreased for the first time since Q2 2022.
Foundation Home Loans director of sales, Grant Hendry, said: “There is a renewed sense of calm and stability from these latest set of landlord results.”
He added that, while there are still some considerable concerns, it’s positive to see confidence generally rising across most of the metrics.
“After a very challenging year in 2023, it’s perhaps not surprising to see landlords being somewhat cautious about what the future might bring, particularly in terms of ongoing finance, but also tenant demand, rental yield, and capital increases,” he continued.
“Clearly, tenant demand has been running at very high levels, and coupled with the supply situation and the need for landlords to cover larger mortgage costs, has meant rents have risen significantly in many areas over the past 12 months.”
The research also found 63 per cent of landlords reported an increased tenant demand in the last three months, down by 8 per cent on the previous quarter.
Conversely, only a minority of 4 per cent of landlords reported decreasing demand.
Portfolios and divestment
The latest results also revealed a more “cautious” landlord community as those with larger portfolios were much more likely to be making a profitable, full-time living from their properties.
The proportion of those able to do this continued to increase in line with the size of the portfolio.
It found those landlords who only own a single property are reported to have the least confidence in terms of rental yields and the PRS as a whole.
But landlords showed less inclination to divest some, or all, of their properties.
Planned divestment was found to be lower than the figures reported in H1 2023, while those planning to acquire property increased by 3 per cent, with landlords with the largest properties continuing to be most likely to acquire at 19 per cent.
The research also showed that landlords seemed, overall, pleased with the government’s decision to put off mandatory EPC levels of C and above for PRS properties.
However, three out of four landlords still expect the the legislation to be introduced in the future, with the average expected timescale for this introduction being three and a half years.
tom.dunstan@ft.com
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