Buy to Let

Landlord confidence rises as yields hold steady

Christina Hoghton
Written By:
Christina Hoghton

Despite softer demand and a raft of regulatory change, landlords are feeling increasingly positive

Landlord confidence edged back up in the third quarter of the year, according to BM Solutions.

The specialist buy-to-let lender found that landlords’ confidence in their own letting business saw the biggest improvement, with their tracker up 5% to 41% from an all-time low position in the second quarter of this year.

They also felt more bullish about prospects for the UK’s financial markets, while confidence in the wider private rental sector saw the biggest year-on-year fall, down 17%. 

Demand down
The confidence comes despite a softening in demand during the third quarter of the year, with only 22% of landlords reporting an increase in demand – the lowest recorded in the last five years.
The average rental yield in remains relatively stable at 5.8%. Landlords operating in the East Midlands currently enjoy the highest rental yield of 6.7%, followed by the North West (6.4%) and North East (6.1%). Those in London (central) achieve the lowest yield (5.1%).
The lender also found that a record proportion of landlords (20%) plan to reduce the number of properties in their portfolio in the next year.
Phil Rickards, head of BM Solutions, said: “The latest report shows that landlords are starting to feel more optimistic following a period of declining confidence during the past 12 months.

“Key measures, especially for their own business have improved from the last quarter, with profitability remaining high. More than eight in 10 (84%) landlords are making a profit from their lettings business.”