Confidence among buy-to-let landlords is increasing nationally, but there are certain areas where landlords are particularly confident about sector prospects with increasing demand and shorter void periods.
Every quarter the National Residential Landlords Association (NRLA) undertakes a survey asking landlords if they are feeling more or less confident about achieving their goals compared to the previous quarter.
National landlord confidence has grown for the third consecutive quarter. Confidence is also at the highest level recorded in the 10 quarters the index has been running. This is the most sustained trend seen for landlord confidence in the buy-to-let sector.
In the past year, 15% of buy-to-let landlords surveyed have purchased property. Those who have bought cited anticipated changes in economic conditions as the most influential factor in their property portfolio decisions. Landlords who have bought recently appear to be particularly optimistic about the future.
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Recently, there has been a pattern of a growing proportion of buy-to-let landlords planning to purchase additional properties. The proportion of landlords planning to buy in the next year is 50% higher than in the first quarter of 2020 with 22% of landlords. This is the fifth quarter in a row where this has increased. Additionally, it’s the highest figure recorded since this survey first began.
Areas with the most and least confident landlords
A number of regions are seeing landlord confidence above the national average. Yorkshire and the Humber leads the way with landlords the most confident there. The West Midlands, north-west, south-west, east of England and East Midlands all came in above the national average of landlord confidence.
Although confidence among landlords has generally increased, the north-east, south-east and East Midlands saw a downturn in confidence compared to the previous quarter. Inner London is where landlords are the least confident throughout England and Wales. And the north-east, London, Wales, Outer London and the south-east also see landlord confidence below the national average.
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Increasing tenant demand
The survey by NRLA has revealed landlords have seen an increase in tenant demand for the second quarter in a row. When asked about their perception of demand in their area, more buy-to-let landlords stated they have noted an increase than a decrease.
The net score from that is the highest NRLA has seen since the association began recording demand in the second quarter of 2019. This score has also grown by nearly 10 percentage points since the previous quarter.
Shorter void periods
On a national level, 67% of vacant properties remain empty for less than four weeks. This is a five percent increase on the previous quarter. It’s also almost as high as pre-pandemic numbers, when this figure stood at 68%.
This shows that the majority of landlords’ properties are being turned over and filled increasingly quickly. These shorter void periods is likely due to the strong demand and need for more housing across England and Wales.
With increasing demand and shorter void periods in the private rented sector, landlords confidence could grow further. This could then lead to more investors expanding their portfolios in the next quarter.
By Kaylene Isherwood
Source: Buy Association
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