When asked how they had been influenced by the uncertainty since the EU Referendum and General Election, well over a third (38%) of UK landlords said they had reviewed the size of their portfolios to ensure they could withstand any creeping costs. 7% have sold off properties to either reduce portfolio sizes or diversify, rising to 19% for those holding 20 properties or more as PRA policy change edges closer.
30% have hiked rental prices, with the greatest proportion doing so in the East Midlands (41%) as landlords recognise the popularity of the region for professionals seeking the balance of space alongside proximity to London.
However, confidence in tenant demand in the East Midlands has not been enough to deflect from the wider pressures bought on by tax and policy changes, as it was also the region with the highest proportion of landlords reviewing the size of their portfolios (50%). Landlords operating in Central and Outer London followed closely behind at (45%) and (40%) respectively.
After the East Midlands, the North West, South East and East of England also saw high percentages of landlords raising their rents (35%, 33% and 33% respectively). Significantly, almost a quarter (24%) of landlords operating in Central and Outer London raised their rent prices, increasing the pressure on those still hoping to afford home ownership.
Almost three quarters (71%) of landlords said they had experienced a drop in confidence; more so for those operating in Central (78%) and Outer London (77%), reflecting the cooling London market and decreasing tenant demand.
Jeff Knight, Marketing Director, Foundation Home Loans, said: “Landlords have been met with a raft of changes, from stamp duty charges to shifts in tax policy, and the lack of certainty on the political front has clouded the picture somewhat. The response has been to ‘batten down the hatches’, streamlining larger portfolios and protecting income by increasing rents – decisions that can be reviewed once the buy to let market is more accommodating. The fact remains that, whether it’s as a stepping stone to home ownership or a longer term lifestyle decision for tenants, the rental sector is an increasingly important part of the housing mix. This will ultimately be best served by a wide choice of property, and good landlords who can have confidence in decent returns.”