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TODAY'S OTHER NEWS

Landlord confidence in BTL market improves after the election

Boris Johnson’s emphatic December general election victory has triggered fresh optimism among buy-to-let landlords, despite tax and regulatory changes hitting their pocket, new research shows. 

A survey of almost 800 landlords conducted by BVA BDRC, on behalf of Paragon, shows that the prospects for their lettings business, portfolio capital values, and the broader financial market has increased since the decisive election outcome. 

Confidence rose across four of five measures during the fourth quarter of last year compared to the previous three months.

Landlord confidence in the UK financial market increased, with almost a quarter - 24% - rating the prospects as good or very good compared to just 9% in Q3 2019. 

The study also found that landlord optimism for the broader private rental sector, capital gains and the landlord’s own lettings business also increased over the period.

Business expectations rated as good or very good for the next three months %

 

Q3 2019

Q4 2019

Own letting business

28

31

UK PRS

14

16

UK financial market

9

24

Capital gains

21

23

Rental yields

40

39

According to the research, landlords are less optimistic about the prospects for yields, but 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 increase, against 14% forecasting a decline.

Paragon’s managing director of mortgages, Richard Rowntree, 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.

“Although tenant demand has remained strong, landlords have had to weather of myriad of regulatory and tax changes over the past five years, so they will be looking for Government to allow those changes to fully bed in and for a period of consistency.”

Regionally, landlords in the South West and East Midlands were most bullish 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.

Business expectations rated as good or very good for the next three months by region %

Own letting business

PRS

Financial Market

Rental Yields

Capital Gains

East of England

37

22

25

44

21

East Midlands

40

16

27

50

29

London (Central)

24

13

11

36

24

London (Outer)

32

16

20

32

24

North East

29

19

21

31

12

North West

23

15

25

37

23

South East

27

17

27

35

23

South West

42

18

28

47

30

Wales

28

13

35

35

23

West Midlands

27

12

16

45

24

Yorkshire and Humber

33

11

25

43

18

Poll: Are you feeling optimistic about the current UK buy-to-let environment?

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