North East landlords believe in rental sector but not their own businesses

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  • 04/06/2020
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North East landlords believe in rental sector but not their own businesses
Landlords in the North East are among the most positive about the private rental sector in the country, yet have the lowest confidence in their own businesses.

 

Investors in this area were most likely to be reducing their portfolios, with none purchasing property in the last three months and sales activity higher than the national average.

North East landlords also reported suffering above average void periods and the highest incidence of rental arrears, although this was partly linked to owning the largest average portfolio size.

The research conducted by BDRC for The Mortgage Works landlord panel, quizzed 863 National Residential Landlords Association (NRLA) members with properties in the UK in Q1 2020.

Overall, the picture was not a pretty one as landlords across the country responded to the outbreak of the coronavirus with significant concerns for future prospects.

 

Bright spots

There were some brighter spots – landlords operating in the South East were generally more upbeat about their own lettings business than the average landlord.

However, this followed significant falls in confidence about the outlook for the UK financial market and for rental yields, which could be linked to landlords in this region reporting the equal lowest demand from tenants.

But despite this 86 per cent said they were still making a profit from their lettings activity, three per cent above average.

 

Steep falls

Confidence among landlords in the South West has been particularly hard hit, the report noted, with those operating in this region feeling less positive than average on four of the five key indicators.

This is most evident in those feeling good or very good about the prospects for rental yields, which has fallen 27 per cent from Q4, to five per centage points below the UK average.

Landlords in the South West also achieved lower yields and were less likely to have bought property in the last three months.

But they were also less likely to have had arrears or experienced void periods and were more likely than average to report tenant demand was increasing.

 

Dedicated income

One notable quirk was that the two London zones, central and outer, were the only ones to report more than a third of landlords running their operations as their main income.

In central London 40 per cent said they make a profitable full time living, with 37 per cent doing so in outer London – only 42 per cent and 45 per cent respectively said lettings supplemented their day job.

In contrast, the majority of respondents in every other region of England said letting income was in addition to another job.

But despite this positive situation, landlords in the capital reported below average confidence across most of the key indicators.

 

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