Landlords in the south of England are markedly more optimistic about the future of the buy-to-let sector than their counterparts elsewhere in the UK, new data from Landbay has revealed.
Polling landlords with a combined portfolio of approximately 2,000 properties, Landbay found that 23% of southern landlords feel positive about their business outlook. This contrasts with 17% in the Midlands and just 13% in the north of England.
By comparison, 44% of landlords in the north described their outlook as negative, while 42% in the Midlands and 39% in the south said the same.
Rob Stanton, sales and distribution director at Landbay, acknowledged the mood among landlords operating outside the south, stating: “Given the current economic climate and the state of play when it comes to taxation and future regulation, landlords in the north and Midlands can be forgiven for not feeling more upbeat about their prospects.”
The data also revealed that the structure through which landlords operate appears to play a significant role in confidence levels. Only 35% of landlords borrowing through limited companies expressed a negative outlook, compared to 56% of those operating as individuals.
Portfolio size also has a bearing on sentiment. Landlords with between four and ten properties were the most upbeat, with 31% expressing a positive outlook. In contrast, landlords with more than 20 properties were notably less confident, with 55% stating they felt negative about their future in the sector.
A landlord operating in the south-east and borrowing predominantly through limited companies said: “Unless the government unleashes a 1960s-type building boom and build a massive number of council houses, the pressure of limited available rental stock versus the demand from young tenants will ensure rents are buoyant and provide a good business for buy-to-let landlords.”
Meanwhile, a landlord based in the West Midlands offered a more downbeat view, telling Landbay: “The future is going to be tough. While there is a demand, there are headwinds and challenges facing landlords.”
Nationally, landlord sentiment is mixed. While 18% said they feel positive about the future, 42% admitted to a negative outlook, and 39% described their stance as neutral.
Despite these headwinds, very few landlords are seeking a full exit from the sector. Only 0.75% of respondents said they were in the process of selling all of their properties. Among those with a neutral outlook, just 25% are considering partial disposals, with none planning to divest entirely.
Furthermore, 47% of those who identify as neutral said they would not rule out expanding their portfolios. Stanton noted the resilience this reflects in the market: “Landlords have seen some huge changes in the buy-to-let market – increases in stamp duty and the Renters’ Rights Bill being two very significant ones – and may have been unsettled by escalating geopolitical tensions recently, too. That’s all hit sentiment.
“While there are certainly some headwinds to contend with, it is reassuring to know so few of them are choosing to cut and run entirely. There are forty landlords looking to expand their properties for every one landlord planning to chuck in their portfolios entirely. Property remains a reliable investment vehicle.
“Not only does demand continue to outstrip supply, rental yields are strong. Add in a broad range of products that can support landlords in a wide variety of situations, and I’d argue that, even with headwinds, there is reason to be optimistic about building, maintaining and expanding a rental portfolio.”
