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Landlord confidence reaches five-year high

Landlord confidence has soared to a record high – but that’s come as no surprise to Martin & Co Managing Director Eric Walker.

Despite the impact of the pandemic, confidence among property investors is at its highest level for five years.

A survey carried out by Paragon Bank asked private landlords to rate their expectations on:

  • Rental yields
  • The future of their property businesses
  • Capital gains
  • The private rented sector as a whole
  • The wider UK financial outlook

The number of landlords whose optimism for the future was rated either ‘Good’ or ‘Very Good’ in the survey exceeded figures from the last survey – carried out in the third quarter of 2016, just before the EU referendum.

More than 600 landlords were surveyed, with results revealing:

  • 48% had ‘Good’ or ‘Very Good’ expectations for their portfolios
  • 47% had ‘Good’ or ‘Very Good’ expectations for capital gains
  • 26% had ‘Good’ or ‘Very Good’ expectations for the UK financial market
  • 38% had ‘Good’ or ‘Very Good’ expectations for the private rented sector
  • 56% with 11 or more properties in their portfolio felt ‘Good’ or ‘Very Good’ about their business prospects
  • 46% with between one and 10 properties felt ‘Good’ or ‘Very Good’ about their business prospects
  • 63% who had recently purchased a rental property felt ‘Good’ or ‘Very Good’ about their business prospects
  • 78% with plans to expand their portfolio over the next 12 months felt ‘Good’ or ‘Very Good’ about their business prospects

Eric said: “To those looking in from the outside, buy-to-let may appear a much less attractive investment than in previous years.

“But the fact is, property remains a powerful asset class and a superb strategy for income generation and pension growth, so it’s no surprise to me to see landlord confidence growing.

“Not only that, but a greater focus on compliance across the private rented sector means tenants are benefiting, too – from better properties, better management and more security.

“It’s a win-win for everyone.”

Richard Rowntree, managing director for mortgages at Paragon, 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 daily, 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.”

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