UK landlord sentiment worsens amid gloomy outlook

Author: Rent Guarantor


UK landlord sentiment is weak right now as they expect taxes and regulations to get worse over the next three years. If you’re a landlord yourself then its likely these worries aren’t new for you and the fact that more Buy-to-Let (BTL) landlords are increasingly concerned about them is probably one of the main reasons why investment into rental homes is currently stalled.

Meanwhile, in a separate end-of-year statement from ARLA PropertyMark, the UK’s Private Rental Sector (PRS) is ending 2019 in a ‘state of despair’. That’s something that could change with enough political will targeted in the right areas. However, as 2019 comes to a close, it appears that landlords, letting agents and others in the industry are in far from a positive frame of mind.

Exactly what are landlords worried about?

Monmouthshire Building Society’s survey shows that the top four areas UK landlords are concerned about are:

  • Tax.
  • Legislation.
  • Costs.
  • Brexit.

Some 72% said they think taxes relating to property investment and the PRS will get worse in the next few years. Legislation came a close second as what landlords are worried about, with a large proportion expecting more rules around property investing and the BTL industry to be created that will have a negative impact on them.

Meanwhile, 71% of landlord respondents said they think costs relating to being a BTL landlord on the PRS will rise. Next on the list of worries, is Brexit, with 45% of landlords anticipating the economy to weaken over the coming one-to-three years as the UK copes with the uncertainty of leaving the EU. Some 23%, however, expect the economy to strengthen over the same period and through the same change.

However, while the recent report from Monmouthshire Building society included some gloom and doom, some landlords are also expecting some opportunities, too:

  • 71% said they expect to see increased demand for their rental properties.
  • Around one quarter of survey respondents said the holiday lets sector was a possible option for them.
  • Due to that likely increase in tenant demand, some landlords also anticipate their ability to increase rents.
  • Meanwhile, almost one-third of landlords said they planned to grow their portfolio in the next three years.

Why the PRS is in a ‘state of despair’

It’s not only landlords who are downbeat about the UK’s PRS, ARLA’s chief executive David Cox is also sharing a pessimistic view of the industry.

“It’s no surprise that tenants have suffered intense rent increases this year. We predicted this would happen as soon as the Government announced a ban on tenant fees, and since the ban came into force in June, rents costs have continued to spiral,” Cox said.

“Additionally, due to the significant amount of legislation that landlords face, this year they have continued to exit the market, which coupled with Brexit uncertainty and the looming general election has left the sector in a state of despair. Unfortunately, next year could go the same way, unless something is done to make the sector a more attractive investment,” he added.

While there are plenty of reasons behind the ARLA chief’s view, its important to remember that the UK’s PRS sector continues to provide an important number of homes for tenants and also, that many investors and BTL landlords enjoy a profitable income from it too. Hopefully, both of these details will continue into 2020.