According to research commissioned by Aldermore from Pegasus Insight, landlords feel this was despite 85% of them saying their investments are profitable. The study showed that just 6% of landlords were making a loss.
The main worries cited by landlords were potential backlogs in the court system for evicting tenants, a concern held by 91% of respondents. Some 88% felt nervous about the 2% rise in income tax for landlords holding properties in their own names, while 84% said they would be more selective about who they let to.
Some 72% said they would recover any losses by increasing rents.
Jon Cooper, director of mortgages at Aldermore, said: “What’s clear from the research is that most landlords have legitimate concerns about how the Renters’ Rights Act will impact their property portfolios.
“Importantly, only 1% of landlords surveyed are unaware of the Renters’ Rights Act, with the vast majority highly aware of the potential implications. It’s vital that all landlords assess how the act will impact their lettings activity, to protect themselves and ensure they’re able to continue offering a positive renting experience for their tenants.”
The new-build energy advantage
Sponsored by Halifax Intermediaries
Although landlord investments are still lucrative, the research showed that expectations for rental yields had dropped to a five-year low as the share of landlords reporting strong tenant demand fell to 61%, a 7% drop on sentiment during the previous quarter and 16% lower than the year before.
Cooper added: “The sector faces challenges, let’s be upfront about that, but landlords are highly resilient. They’re also a cornerstone of the UK’s housing supply. The Renters’ Rights Act is being introduced with noble objectives in mind, and the vast majority of the UK’s two million or so landlords will agree that supporting their tenants is a key component of what they do.
“However, this research does highlight the tensions many landlords feel when it comes to potential knock-on effects of the act coming into force. Maintaining an open dialogue between all parties and assessing the effectiveness of the act as it beds in over time will be of the utmost importance.”
