Confidence remains high among limited-company landlords

Confidence among limited-company landlords remains high, with Kensington Mortgages’ latest BTL Barometer survey finding 80% are confident about the UK rental outlook.

However, the 500-strong sample revealed moderation in attitudes regarding rental yields, tenant demand and property prices.

Seven out of ten (71%) landlords expect rental yields to increase over the next 12 months, down from 84% previously, while almost two-thirds (65%) expect rental demand to rise, compared with 80% earlier this year.

Nearly seven in ten (69%) anticipate property prices increasing, down from more than three-quarters (77%).

However, less than six in ten (59%) expect mortgage costs to increase over the next year, a significant decrease from 77% previously.

Additionally, nearly three-quarters (73%) say their running costs — including repairs, insurance, utilities and maintenance — have increased over the past year, down from 81% previously.

Landlords also face difficulty accessing finance.

The survey found that only 42% of landlords described accessing BTL mortgages as “easy”, a sharp drop from the 74% who felt the same way earlier in the year.

Concerns around regulation remain elevated. Three-quarters (75%) expect the UK property market’s regulatory environment to become more challenging over the next 12 months.

This was only slightly lower than the 79% who felt the same way earlier in the year. 

Almost all (99%) say potential reforms, such as proposals to replace council tax and stamp duty, would influence their future property investment plans to at least some extent.

To counteract this, landlords are focusing on consolidating their portfolios instead of expanding.

Only 11% intend to expand their property portfolio over the next 12 months, down from nearly four in ten (38%) previously. Instead, more than three-quarters (77%) plan to maintain the size of their portfolio, up significantly from just over half (53%).

“Landlord confidence remains resilient, but our latest BTL Barometer points to a market that is becoming more considered in its outlook,” said Allison Buckley, CEO at Kensington Mortgages.

“As landlords balance investment in their existing properties with changing regulatory, taxation and financing considerations, specialist lenders and brokers have an important role to play.

“Flexible financing solutions and specialist expertise will remain key to helping professional landlords navigate these challenges and make informed decisions about their portfolios.”