Landlords’ confidence for their own business showed only 29% of landlords had positive expectations for their letting business over the next three months, down from 44% the same time last year and now at a historic low, according to the latest BVA BDRC Landlords Panel surveying over 700 active landlords in Q2 2019.
The panel uses five confidence indices – Capital Gains, Rental Yields, UK Financial Market, UK Private Sector and Own Letting Business - which are now at their lowest levels in seven years.
Confidence in capital gains fell to 23% in the quarter, from 32% in Q2 2018, and prospects for rental yields dropped 10% from 49% in the second quarter of 2018 to 39% in the second quarter 2019, the lowest recorded in over nine years.
More broadly, confidence in the sector and economy overall declined with 15% optimistic about the UK Private Rented Sector, down from 21% a year ago, and 11% optimistic about the UK Financial market, down from 15% in Q2 2019.
Damian Thompson, director of mortgages at Aldermore said: “The Private Rented Sector is a significantly important part of the UK housing market, so it is concerning that many landlords have a bleak outlook at the moment. We however saw UK buy to let lending in 2018 increase 4% on 2017, buoyed by remortgaging, and 2019 lending has been on par with these volumes. The rise in activity would suggest the market is not necessarily in decline but in a state of change as landlords diversify their needs away from a growth strategy and the sector adjusts to the gradual shift towards professionalisation.