You are here: Home - News -

Nine in ten landlords profitable with tenant demand rising – BM Solutions

  • 24/10/2018
  • 0
More landlords have made a profit from their buy-to-let properties in the third quarter of the year, according to research from BM Solutions.


Almost nine in ten landlords have made profits from their lettings activity, reporting an increase of 2% in Q3 2018 from the previous three months.

The research found that active landlords have not experienced any increased financial difficulty this quarter, with the overall landlord profitability index reaching an historic high of +85.

However, landlords are feeling less confident year-on-year when it comes to the prospect of capital gains and the UK financial markets. Landlord confidence in their own letting business remains 7% above the historic low of 36% recorded in Q2 2017.

Head of BM Solutions, Phil Rickards, said that for those speculating about the future of buy to let, the figures supporting tenant demand should help to dispel this myth.

He added: “Considering the much talked about shortage of housing supply, it is vital that we continue to support a healthy private rented sector (PRS) and with tenant demand scores improving or remaining stable across all UK regions, it is clear that the PRS still has a very important part to play.”


Rental yields

The average rental yield dropped this quarter from 6.2% to 5.9%. This follows the 0.4% rise recorded in Q2, when average rental yields were at their highest point since Q4 2014.

Landlords operating in the North West and Wales are currently generating the highest yields at 6.7% and 6.3% respectively. Rental yields are the lowest in Central London, standing at 5.3%, and Scotland at 4.7%.

Meanwhile, tenant demand has increased to the highest level recorded since Q2 2017, but there are regional variations.

The proportion of landlords reporting a drop in tenant demand is now at its lowest point since the end of 2016, falling 8% from last quarter. Central London has seen a 9% rise in the proportion reporting increasing demand for rental properties, and a 14% fall in the number of landlords who feel that demand has decreased in the last three months.


Rent and mortgage interest increases

A third of landlords raised rents over the past 12 months, representing a slight increase from Q2 2018.

There has also been an increase in the proportion planning to increase rents in the next six months, reaching 27% from 24%, while there has been a fall of only 4% in landlords planning to reduce rents.

More landlords are also seeing rents rising in the areas where they let properties, with an increase of 9% from Q2.

Four fifths of landlords expect their mortgage provider to increase their mortgage interest rate due to recent base rate rises.

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
headshot Steve Carruthers Newcastle BS
Newcastle launches interest-only, TSB offers free valuations, Bluestone enters Help to Buy Wales and NatWest cuts ICR – roundup

TSB and Newcastle Intermediaries have extended their range of residential mortgages, while Bluestone Mortgages has launched its Help to Buy...