The latest quarterly Index from BM Solutions reveals a significant fall in the number of landlords looking to expand their buy-to-let portfolios.
According to data from the firm, only 13% of landlords are planning to add to their portfolio-the smallest proportion since the survey started some 11 years ago.
Undoubtedly, the raft of tax changes impacting on the sector in recent times is a key reason for landlords looking to leave. However, tenant demand also slowed during the opening quarter of 2017, with 17% of landlords registering a decline.
This is most prominent in central and outer London, where the number of landlords registering lower tenant demand is now outnumbering those seeing growth.
Despite this, the number of landlords feeling confident about the UK’s financial markets has doubled over the last year.
Landlords in the South East are most optimistic about the prospects of their own business. 47% of investors here said that they were feeling either ‘good’ or ‘very good’ about this. On the other hand, those in Scotland and Wales were found to be least optimistic, with only 26% feeling positive.
In terms of rental rises, 48% of landlords are seeing rents increase in their area, in comparison to 53% in the final quarter of 2016. 42% of landlords have increased rents across their own portfolio in the last year, down by 3% from Q4 2016.
These findings are based upon responses from 754 online interviews with members of the National Landlords Association.
Phil Rickards, head of BM Solutions, observed: ‘Despite signs of landlord confidence stabilising this quarter, fewer landlords are feeling optimistic about the prospects for their own businesses. This has driven down the number of those looking to expand their portfolio further to a new all-time low despite the average portfolio creeping up slightly.’
‘The impact of the tax changes has a natural link to landlord confidence, as the market landscape continues to be reshaped by changes in regulation,’ he added.