Brexit and Westminster uncertainty hurting rental sector
Political uncertainty across the UK and increased restrictions on buy to let are leading many landlords in the rental sector to raise rents and review their portfolios, according to a lender.
A survey of 780 landlords conducted for Foundation Home Loans by BDRC Continental discovered that, when asked how they had been influenced by Brexit and General Election uncertainty, 38 per cent admitted they had reviewed the size of their portfolios to ensure they could withstand any creeping costs.
Another seven per cent have sold off properties to either reduce portfolio sizes or diversify, rising to 19 per cent for those holding 20 properties or more as the Prudential Regulation Authority lending restrictions for this category edge closer.
Some 30 per cent of respondents say they have hiked rental prices, with the greatest proportion doing so in the East Midlands (41 per cent) as landlords recognise the popularity of the region for professionals seeking the balance of space alongside proximity to London, says Foundation Home Loans.
However, confidence in tenant demand in the East Midlands has not been enough to deflect from the wider pressures bought on by tax and policy changes, as it was also the region with the highest proportion of landlords reviewing the size of their portfolios (50 per cent).
Landlords operating in Central and Outer London followed closely behind at 45 and 40 per cent respectively.
Almost three quarters of all landlords said they had experienced a drop in confidence.
“Landlords have been met with a raft of changes, from stamp duty charges to shifts in tax policy, and the lack of certainty on the political front has clouded the picture somewhat. The response has been to ‘batten down the hatches’, streamlining larger portfolios and protecting income by increasing rents – decisions that can be reviewed once the buy to let market is more accommodating” explains Jeff Knight, Foundation’s marketing director.
“The fact remains that, whether it’s as a stepping stone to home ownership or a longer term lifestyle decision for tenants, the rental sector is an increasingly important part of the housing mix. This will ultimately be best served by a wide choice of property, and good landlords who can have confidence in decent returns.”