The BM Solutions buy-to-let quarterly index showed tenant competition at its highest in the East Midlands, where demand rose 12% to 47%. Only 5% of landlords reported seeing demand weakening.
The North East and South West were the only regions to see a decrease, both falling 8% to 31% and 37% respectively.
However, landlords’ confidence in the UK’s private rental sector has dropped from 59% in the second quarter of the year to 34% in Q3.
The average rental yield fell to its lowest level for five years, 5.7%, in the first quarter of the year. It fell further to 5.6% in Q3. Yorkshire & Humber and Wales achieved the highest rental yield of 6.1%. Landlords with properties in Scotland and Outer London saw the lowest yields of 5.1% and 4.8% respectively.
The typical landlord portfolio is worth around £1.3m and generates an annual gross rental income of £60,000, divided between an average of eight properties. This equates to a value of £162,800 per property.
Central London portfolios, including properties in zones 1 and 2, generate the highest gross rental income at £85,000, while Wales generates the lowest at £55,000.
Almost two thirds (60%) of landlords intend to live off the rental income their portfolio generates when they retire, and a further one in three (36%) will make a decision based on the market when they reach retirement.
Phil Rickards, head of BM Solutions, said that while confidence and business have seen declines compared to Q3 14, the market is still holding up.
“There’s no doubt 2016 looks like a challenging year ahead, however I take comfort in the fact there’s still a need for a strong private rental sector along with good quality housing to support demand.”