This applies as much to the buy-to-let (BTL) sector as the rest of the property market. 

It could be argued that landlords in particular have reason to be anxious given the backdrop over recent years of increasing regulation and mounting costs. Couple this with growing anti-landlord policy and successive shocks to the economy with the Truss mini Budget and high inflation, and landlord confidence could do with a boost.

Our latest survey, conducted before the general election, found that a small number of landlords were anxious. Those landlords who felt negative about the sector cited uncertainty over a change in government and potential rental reform. Some were particularly worried about the proposed abolishment of ‘no-fault’ evictions, or Section 21s, to which both Conservatives and Labour had committed.

Several landlords mentioned anti-landlord sentiment as a problem. One said: “Everyone is anti-landlord. With the lack of affordable housing, we are the scapegoats.” 

But, overall, we found that fewer landlords were feeling negative about the prospects of their BTL business and investments than at the end of last year. Most landlords remained neutral. Some 27% of the landlords surveyed felt negative about their business, compared to 37% at the end of last year. While 40% of landlords were neutral, just under 33% felt positive.

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A different perspective on BTL

Those investors that do well in the BTL market tend to take a longer view. It has to be remembered that the sector is resilient, weathering all manner of bumps in the road over time.

It has survived countless crises and changing governments over the years. 

Those landlords in our survey who were positive echoed that longer-term perspective. They highlighted increased or steady demand as the reason for optimism. One landlord commented: “While the world is uncertain, the demand for residential property and accommodation is and will remain very high.” 

This is certainly backed up by strong evidence. Zoopla recently reported that as many as 15 households are chasing every rental home, while Rightmove has said that Britain needs 120,000 more rental homes to be built immediately to bring rent increases back to a “more normal” 2% per year. 

The strongest positive sentiment was among those landlords with portfolios over 20 properties, which suggests that those with bigger business, and potentially more experience, are the most confident.

Among house in multiple occupation (HMO) landlords, 43% felt positive about their businesses, with just under 30% feeling negative. 

 

Market positivity 

There are many reasons to be optimistic about BTL, which continues to thrive.

With affordability still a real challenge for residential buyers and demand continuing to outstrip supply, there is an abundance of tenants ready to rent across the country.

Our survey also revealed that more landlords are intending to buy properties than when we last asked them about their future plans in our survey at the end of 2023.

Hopefully, anxiety among landlords will be short-lived once the dust settles with the new government and there is more certainty about proposed reform. Landlords may need to hold their nerve and take a long view. 

But the government should commit to supporting the rental sector and nurturing confidence among landlords. Decent rented properties run by responsible landlords are absolutely key to the health and prosperity of the UK housing market, helping to provide much-needed accommodation.

As a BTL lender, we are incredibly positive about the future of the sector and remain committed to innovating to meet the needs of landlords.