UK landlords are feeling downbeat about their properties as house price growth slows and tax burdens rise, according to Kent Reliance’s Buy to Let Britain report.
The report found that just 41 per cent of landlords are confident about the prospects for their portfolios, down from 44 per cent in the previous quarter. Three years ago, this figure stood at 67 per cent.
Kent Reliance also found that the value of the private rented sector has risen by £68bn in the last year, climbing to a record of £1.3 trillion. However, the 5.5 per cent annual rate of increase is just half the level seen a year ago.
In London, 1.1m households exist in the private rented (PRS) sector, it has grown by nearly half a million households in the last 10 years.
The value of London's PRS has grown by £23bn to hit £556bn.However, it is the slowest since 2011 and 3.9 per cent slower than national average.
Andy Golding, chief executive of OneSavings Bank, which trades under the Kent Reliance and InterBay brands in buy to let, said: “A perfect storm of weakening house prices, higher taxes and lending restrictions have knocked investors’ confidence. On top of this, investors are now being buffeted by the winds of political uncertainty following the election, and its impact on the economy.
“Uncertainty will pass, but the impact of changes to mortgage tax relief and underwriting standards will leave a more indelible mark on the sector. We believe these changes will alter the mix of landlords, creating a more professional and stable sector in the long-term. There are already some signs of consolidation, with highly geared amateur landlords most likely to leave, and we are also seeing investors take action to protect their margins.
“The fundamentals supporting the PRS have not drastically changed. Yes, first-time buyer numbers have been recovering, but there is still an underlying supply and demand gap across the country. Given the inability of any party to win a clear majority in the election, the implementation of a strategy to create a necessary housing boom seems unlikely. Affordability issues will therefore remain, and rental accommodation will retain its importance to those unable to take their first step onto the property ladder.”