Landlord confidence in UK economy falls to lowest in five years

 

Landlord confidence in the economy has tumbled by 8% year-on-year, the lowest level in five years, the latest results from BM Solutions show.

 

The latest figures reveal landlords are feeling the effects of regulatory changes, particularly landlords with larger portfolios.

 

 

The quarterly landlords’ panel revealed that confidence in the UK economy in the near-term had fallen to 9% in Q4 compared to 17% for the same quarter in 2017.

 

More than half of landlords said their profits had been dented since changes to the buy-to-let market were announced in 2015.

 

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Of those asked, 55% of landlords said their profitability has been affected, while three quarters (75%) of those with portfolios of between 11 and 19 properties said they had been negatively impacted.

 

The pressure is impacting landlords to the extent that 23% of those asked said they planned to sell at least one property in 2019 with landlords in the 11 to 19 property bracket twice as likely to be considering selling.

 

Just 15% said they intended to add to their portfolio.

 

Compounding the problems was an increase in void incidence, that is any length of time a property is vacant, to the highest level in five years. In the north of England, about 60% of landlords had experienced void periods in Q4.

 

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Tenant demand varied across the country, with East Midlands experiencing an 8% rise in demand, while the east of England saw the biggest fall in demand, dropping 18%. Central London recorded a drop in tenant demand of 11%.

 

Yields in outer London, Yorkshire and the Humber and the North East stood at 6%, with London the worst at 4.7%.

 

But despite the gloomy figures, the proportion of landlords making a profit from letting activity remains at 88%, equalling the record high seen in Q3 2018.

 

BM Solutions head Phil Rickards says: “The BTL industry has been through many regulatory changes over the past few years, and the effects of this are clearly being felt… however, the landscape is not entirely bleak.

 

“It is clear that the market is sensitive to the current legislative and macro-economic environment and this has been reflected in the latest findings.”

 

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30th January 2019