The proportion of landlords feeling optimistic about their property investments has reached its highest level in five years, said Paragon Bank.

The buy-to-let lending specialist commissioned research with landlords about their expectations for rental yields, their lettings business, capital gains, the private rental sector, and the UK financial market.

The results showed they are feeling pretty confident overall. The number of those with good or very good expectations for their business was up across all areas compared to the first quarter of 2020. In fact, their confidence levels even exceeded those just before the Brexit vote, in 2016.

The bigger the better

Landlords with larger portfolios are feeling most confident, according the survey.

Those managing larger portfolios were more upbeat about the prospects for their own lettings business – 56% of landlords with 11 or more properties felt ‘good’ or ‘very good’, falling to 46% amongst those with between one and 10 properties.

There was, unsurprisingly, a correlation between confidence and property purchase behaviour. A positive outlook was noted amongst almost two-thirds (63%) of those who have recently purchased a property, compared to just under half (48%) amongst all respondents. And over three-quarters (78%) of landlords who plan to expand their lettings business in the next year are optimistic.

Richard Rowntree, managing director for mortgages, said: “Understandably, landlord confidence fell sharply in the first quarter of 2020, as the extent of the pandemic became clear.

“It is fantastic to see optimism bounce back and rise in the time since; it is an indication of the strength of the sector.

“Landlords see the sector’s issues and opportunities on a daily basis so measuring their outlook can provide useful insight for the industry and, as we see here, investor confidence can have a real impact on behaviour.”