Landlords Note Promising Signs in the UK Property Sector | RWinvest Skip to content

Landlords Note Promising Signs in the UK Property Sector

Don't miss out on the best new investment deals. Enter your details now to sign up to our mailing list and receive exclusive information straight to your inbox.

    Landlords More Confident in Multiple Property Investment Metrics

    The latest Q4 2023 BVA BDRC Landlord Panel research report indicates a consistent year-on-year growth in landlord confidence across various metrics. Landlord optimism has sustained a positive score, continuing from Q3 of the previous year, which followed a year marked by negative scores.

    Let’s look at those findings in more detail and see what they could mean for those buying a UK rental property this year.

    Find Out More: Check out our guide on the best place to invest in property if you want more buy-to-let insights.

    Liverpool's Biggest, Boldest Development!

    Last chance to invest! Earn up to £28k Annually with 6% assured yields.


      How Do Landlords Feel About the UK Property Market Right Now?

      Quarterly results demonstrate that landlord confidence in their own lettings business remains steady, with rental yields being the only metric among the five to experience a decline. The drop in rental yield confidence is attributed to a perceived decrease in tenant demand, marking the first decline since Q2 2022.

      However, this is not indicative of the country as a whole. While London yields are considerably low, more northern regions continue to boast good yield averages. For example, Zoopla shows that the top 10 cities for yields are all located in the North or Scotland.

      Within the last three months, 63% of landlords reported an increase in tenant demand, reflecting an 8% decrease from the previous quarter. The decline is mainly driven by more landlords expressing uncertainty, with only a minority (4%) reporting a decline in demand.

      Regionally, the North West sees the most significant increases in tenant demand, according to landlords, followed by Yorkshire and the Humber. In contrast, the West Midlands reports a notable decrease, down by 26% quarter-on-quarter.

      The research, consisting of 398 online interviews with landlords, was conducted in December on behalf of Foundation Home Loans, an intermediary-only specialist lender.

      The latest findings unveil a more cautious landlord community. Landlords with more extensive portfolios are increasingly likely to generate a profitable, full-time income from their properties, and this trend continues to align with the portfolio’s size. They will also be less likely to feel the sting of any void periods if they have more properties to absorb potential losses.

      Landlords owning a single property exhibit the least confidence in rental yields and the Private Rented Sector (PRS) overall.

      Despite the caution, landlords show a reduced inclination to divest some or all of their properties. Planned divestment is lower than figures reported in H1 of the previous year, while those planning to buy new property have increased by 3%. Notably, landlords with the largest properties remain the most likely to acquire, at 19%.

      In response to the government’s decision to postpone mandatory EPC levels of C and above for PRS properties until 2025 – 2028, landlords, on the whole, express satisfaction. 64% of all landlords are content, rising to 80% for those who own 11 or more properties.

      However, three out of four landlords still anticipate the eventual introduction of such legislation in the future, with an average expectation of three and a half years for its implementation. For that reason, buy-to-let investors may want to consider buy-to-let properties that reach these EPC levels now – such as new builds – as it will mean they do not need to invest in costly energy efficiency technology further down the line. Why not learn more about how to make money from property with our free guide.

      Discover More: Develop your property investment strategy in the UK with our guide on what to invest in right now.

      Looking for a Stress-Free Investment?

      Secure a 2-bed townhouse for just £35,495, with nothing to pay until next year!

      What Do These Findings Say About UK Property?

      Director of Sales at Foundation Home Loans, Grant Hendry, said the following about the BVA BDRC Landlord Panel Research Report:

      “There is a renewed sense of calm and stability from these latest set of landlord results, and while it’s clear there are still some considerable concerns for active participants in the PRS, it’s positive to see confidence generally rising across most of
      the metrics.

      “After a very challenging year in 2023, it’s perhaps not surprising to see landlords being somewhat cautious about what the future might bring, particularly in terms of ongoing finance, but also tenant demand, rental yield, and capital increases.

      “Clearly, tenant demand has been running at very high levels, and coupled with the supply situation and the need for landlords to cover larger mortgage costs, has meant rents have risen significantly in many areas over the past 12 months.”

      Explore the UK rental market in greater detail with our updated buy-to-let area guides:

      Landlords Note Promising Signs in the UK Property Sector

      Disclaimer Image
      Avatar photo

      Dale Barham

      LinkedIn Logo

      Dale is a property news and onsite content writer at RWinvest.