The latest research commissioned by Paragon Bank has revealed a significant rebound in landlord confidence in the UK.
Conducted by research agency BVA BDRC, the study shows optimism among landlords now surpassing levels seen in the same period last year.
Key findings from the research include a 16% rise in landlords’ outlook for rental yields since Q2 2023.
Now, 49% of landlords rate their expectations for rental yields as either good or very good for Q3.
This trend correlates with an 11% increase in landlords’ confidence in the prospects of their own lettings business, marking the second-largest rise observed.
Confidence in the private rented sector (PRS) has increased by 8% compared to the second quarter, with expectations for capital gains climbing by 6% .
The study, involving nearly 800 landlords, also notes a modest 2% increase in optimism for the UK financial market.
These findings indicate heightened confidence among landlords in all aspects of letting, with the exception of capital gains, compared to the same period in 2022. The most notable improvements are seen in rental yields and their own lettings business.
Richard Rowntree, managing director of mortgages at Paragon Bank, said: “It’s great to see a lift in optimism amongst landlords, reflecting some of the stability that we’ve seen return to the market and economy more broadly.
“Landlords play a vital role in the UK’s housing provision, so it is important that they feel confident in the investment environment, particularly at a time when demand continues to outstrip supply.
“Although there is still work to be done on all sides as we work to improve the PRS for both tenants and landlords, we’re encouraged by signs that the value of private investment is being recognised by Government.
“I imagine that recent policy announcements will have had a positive influence on how landlords see the prospects for the sector and their businesses.”
Rowntree also highlighted the potential impact of recent legislative developments on landlord sentiment: “It’s also worth noting that this research was undertaken before it was announced that the removal of Section 21 would be delayed until court reforms and a new ground for possession for student landlords was created.
“These are both significant changes to the Renter’s Reform Bill that will likely be welcomed by landlords so could add to the more positive outlook.”
