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Landlords regain confidence in Q3 – Paragon

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  • 20/11/2023
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Landlords regain confidence in Q3 – Paragon
Private landlords showed signs of confidence in the sector in Q3 and were more optimistic than this time last year, a lender’s survey found.

Research conducted by BVA BDRC on behalf of Paragon Bank found that the changed sentiment was a result of a more stable market and economic environment. 

Some 49 per cent of landlords said the outlook for rental yields was either good or very good, which was 16 per cent up on Q2. There was also an 11 per cent uplift in the proportion of landlords who were confident in the prospects of their own lettings business. 

Compared to Q2, the share of landlords who felt positive about the private rental sector rose by eight per cent, while expectations for capital gains increased by six per cent. 

Landlord responses were a little more subdued when asked about the outlook of the UK financial market, as there was just a two per cent increase in respondents showing optimism. 

Overall, landlords showed more confidence on all metrics except capital gains compared to last year. The most optimism was seen towards rental yields and their own business. 

 

Government changes could improve landlord optimism

Richard Rowntree, managing director of mortgages at Paragon Bank, said: “It’s great to see a lift in optimism amongst landlords, reflecting some of the stability that we’ve seen return to the market and economy more broadly. 

“Landlords play a vital role in the UK’s housing provision, so it is important that they feel confident in the investment environment, particularly at a time when demand continues to outstrip supply. Although there is still work to be done on all sides as we work to improve the private rental sector for both tenants and landlords, we’re encouraged by signs that the value of private investment is being recognised by government. I imagine that recent policy announcements will have had a positive influence on how landlords see the prospects for the sector and their businesses.”

He added: “It’s also worth noting that this research was undertaken before it was announced that the removal of Section 21 would be delayed until court reforms and a new ground for possession for student landlords was created. These are both significant changes to the Renter’s Reform Bill that will likely be welcomed by landlords so could add to the more positive outlook.” 

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