New data published by Kent Reliance as part of its Buy to Let Britain report shows that confidence in the market among landlords fall in the first quarter of the year.
The survey, conducted in association with BDRC Continental and OneSavings Bank, asked 754 landlords how positive they were feeling about the prospects of their portfolios. Fewer than half of all respondents, 41%, said they were feeling confident about the future performance of their properties, down from 44% in the last quarter of 2016.
This marks a steep fall in confidence compared to three years ago when 67% of landlords expressed confidence the future performance of their portfolios.
Only 10% of the landlords surveyed said they had added to their portfolios in the first three months of 2017, while 8% said that they had reduced the number of properties they owned. The numbers reducing their holdings look set to increase, however, with 19% of landlords saying they expect to reduce their portfolios, while only 13% have plans to expand.
These figures reflect the impact of recent reforms to the private rented sector which have left many landlords considering exiting the sector in the face of significantly higher tax bills.
Demand also appears to be slowing, with 27% of landlords reporting an increase in demand, down significantly on the same time last year when 39% reported increasing demand.
Andy Goulding, chief executive officer of OneSavings Bank, said changes have come thick and fast for landlords.
He said; This April saw changes to tax treatment of BTL mortgages introduced, raising costs for many landlords. The Prudential Regulation Authority first round of changes to mortgage underwriting took effect from January, with the second; altering the way larger portfolio landlords are treated, set to come in to play in October.
“Against this backdrop, costs continue to rise, even before we factor in higher tax bills for many landlords. In the last report from our Buy to Let Britain Research Series showed that the annual running costs of a buy to let property have reached £3,632, up a quarter since 2007.
"These factors are clearly beginning to drag on the growth of the sector; landlords have had to navigate the changing tides of taxation and regulation, at the same time as seeing the cost of doing business increase. We look at how they are doing so, how returns and rents are performing, and whether demand for, and access to, mortgage finance has been hit."
If you’re a landlord worried about the prospects for your portfolio or are considering exiting the sector but have debt worries, contact Landlord Debt Advisory on 0161 222 4311 or go online to landlorddebtadvisory.com.