Majority of landlords adapt to tough conditions
Landlords are beginning to adapt to tough new market conditions with the majority feeling positive, despite continual assaults from government, a new survey has found.
The survey of 754 landlords in the opening quarter of 2017, run with BDRC Continental for a Buy to Let Britain report from Kent Reliance, revealed 41 per cent were positive about their portfolios.
Although this figure was well down on the 67 per cent who were confident three years ago, the first quarter still saw 10 per cent of landlords add to their portfolios – slightly outnumbering the 8 per cent who reduced holdings.
In the next three months, 13 per cent of landlords asked expect to increase their portfolios. And although the tenant population is growing at a slower rate than in recent years, 27 per cent of landlords saw demand rise during the last quarter.
Experts believe the reality of increased tax and running costs will 'undermine supply moving forwards' and lead to some smaller landlords leaving the market as they are pushed into a higher tax bracket.
Andy Golding, chief executive officer at OneSavings Bank, said changes to the sector 'have come thick and fast' in recent months.
The government’s housing white paper in February recognised the need to stimulate housebuilding and loosen restrictive planning rules, he said, and was followed by a raft of pledges in each of the political parties’ manifestos ahead of the recent general election.
He said: "The Conservatives promised to build 1.5 million homes by the end of 2022 while Labour committed to build 100,000 council and housing association homes a year.
"The failure of either party to secure a majority questions whether these promises will be met with action, however we have at least seen a firm recognition of the scale of the housing crisis,"
He added: "While this will hopefully shape the wider housing market in the longer term, landlords have been getting to grips with more immediate changes.
"In the last report from our Buy to Let Britain Research Series showed that the annual running costs of a buy to let property have reached £3,632 – up a quarter since 2007.
"These factors are clearly beginning to drag on the growth of the sector; landlords have had to navigate the changing tides of taxation and regulation, at the same time as seeing the cost of doing business increase."