Landlords batten down the hatches in the face of uncertainty
When quizzed on their response to the uncertainty following the Brexit vote and the General Election, more than a third (38%) of UK landlords said they had reviewed the size of their portfolios to ensure they could cope with cost increases. Already 7% have sold one or more properties, rising to 19% of landlords with portfolios of 20 or more properties.
Nationwide, 30% of UK landlords have increased the rents they charge, more in some areas than others. The East Midlands has seen the most, with 41% of landlords hiking rents as they recognise the popularity of the region for professionals seeking the balance of space alongside proximity to London, according to the research.
But optimism regarding tenant demand in the region has not negated the pressures bought on by tax and policy changes, as the East Midlands also revealed the highest proportion of landlords reviewing the size of their portfolios (50%). Landlords operating in Central and Outer London followed at (45%) and (40%) respectively.
After the East Midlands, the North West, South East and East of England also saw high percentages of landlords raising their rents (35%, 33% and 33% respectively). Significantly, almost a quarter (24%) of landlords operating in Central and Outer London raised their rent prices, increasing the pressure on those still hoping to afford home ownership.
Almost three quarters (71%) of landlords said they had experienced a drop in confidence; more so for those operating in Central (78%) and Outer London (77%), reflecting the cooling London market and decreasing tenant demand.
Jeff Knight, marketing director, Foundation Home Loans, said: “Landlords have been met with a raft of changes, from stamp duty charges to shifts in tax policy, and the lack of certainty on the political front has clouded the picture somewhat. The response has been to ‘batten down the hatches’, streamlining larger portfolios and protecting income by increasing rents – decisions that can be reviewed once the buy to let market is more accommodating. The fact remains that, whether it’s as a stepping stone to home ownership or a longer term lifestyle decision for tenants, the rental sector is an increasingly important part of the housing mix. This will ultimately be best served by a wide choice of property, and good landlords who can have confidence in decent returns.”