Uptick in landlord confidence
Landlord confidence has increased, according to research from buy-to-let lender Paragon.
In its quarterly survey of nearly 800 landlords by BVA BDRC, the lender found that confidence rose across four of five measures during the fourth quarter of 2019 compared to the previous three months.
Confidence in the UK financial market leapt among landlords, with 24% rating the prospects as good or very good compared to just 9% in the third quarter of last year.
Optimism for the broader private rental sector, capital gains and the landlord’s own lettings business also increased over the period.
What about their income?
Landlords are less optimistic about the prospects for yields – which is worked out as gross rental income as a proportion of portfolio value – said Paragon. However, they still believe both rents and property prices will increase as a direct result of the election. A quarter of respondents said rents would rise, compared to 1% who predict a fall, whilst 32% expect property prices to rise, against 14% forecasting a decline.
Richard Rowntree, Paragon managing director of mortgages, said: “After several quarters of declining optimism amongst landlords, it’s pleasing to see the green shoots of recovery in confidence. Although still low compared to historic levels, a more certain political and economic landscape will hopefully provide the platform for confidence to continue to grow.”
Where landlords are most bullish
Landlords in the South West and East Midlands were most optimistic about the prospects for their own lettings business over the next three months, whilst landlords from these regions were also most confident about yields in the period.
Additionally, landlords with 11 or more properties tended to be more upbeat on the prospects for rental yield and the financial markets than those with smaller portfolios.