After five successive rises from the second quarter of 2022, the number of landlords who said they were planning to divest some, or all, of their portfolio in the next 12 months has declined from 37% in the second quarter to 28% in the three months to September
Landlords’ confidence in BTL is on the up and falling numbers of investors are planning to sell some or all of their portfolios.
After five successive rises from the second quarter of 2022, the number of landlords who said they were planning to divest some, or all, of their portfolio in the next 12 months has declined from 37% in the second quarter to 28% in the three months to September.
In the meantime, 8% of landlords interviewed said they planned to increase the size of their portfolio over the next year. Around 18% of landlords with more than 20 properties said they would be adding to portfolios in the next 12 months.
The research, carried out by BVA BDRC on behalf of Foundation Homeloans, comprised 785 online landlord interviews.
The findings highlighted that as tenant demand had increased, and after the government’s decision to scrap Energy Performance Certificate (EPC) targets, landlords’ confidence has increased.
Many landlords are expecting continued increases in rental yield, a stronger performance from their own letting businesses, capital gains across the portfolio, and a better private rental sector as a whole.
Foundation Homeloans said the drop in the number of those landlords planning to divest, coupled with larger portfolio landlords seeking to acquire properties, stemmed largely from perceived tenant demand.
More than 70% of landlords surveyed reported a rise in tenant demand, up by 4% since the last quarter and reaching an all-time high. Only 3% of landlords reported a decline in tenant demand.
The proportion of landlords who had seen rising rents in the last year was up 5% on the last quarter’s results. Rental yield also rose quarter-on-quarter, up by 0.1% to 5.3%.
Landlords in the East Midlands reported the highest rental yields this quarter at 6.5%.
Those in both outer and central London achieved the lowest yields, sitting below 5%. Landlords with the biggest portfolios achieved the highest rental yields at 6% on average.