Despite high demand, UK market worries many property owners
Increasing demand in the UK’s private property rental sector hasn’t boosted landlord confidence in buy to let, according to the latest market survey.
Landlord confidence in the buy to let market is still shaky despite record tenant demand with the latest findings from the Upad Landlord Confidence Index showing that just 57% of private residential landlords say they are more confident than last month in the lettings market.
Of those who said they were more confident, most cited tenant demand as their reason. They said that there are lots more people looking for property than last year and rents have increased.
The report also shows that they believe that demand for rented properties still good, voids are low due to the large number of tenants out there and the outlook is good. Landlords from the southeast and southwest were particularly likely to say that demand in their areas was up.
A large number though are also less confident, citing government cuts, particularly to benefits. ‘I try to give good housing to people who are unemployed and on benefits, so I’m concerned that I will have to evict people when the new benefit rules come out as they won’t be able to pay the rent. I don’t charge unreasonable rent. It mainly just covers the mortgage,’ one landlord said.
Others who said they were less confident said that they were concerned about the general economic conditions. ‘I’m less confident. Is there going to be another dip? Banks may be only riding the wave on the back of quantitative easing,’ was a typical response. One landlord even revealed that he has had to drop prices of new lets for first time in 10 years.
‘Despite strong tenant demand in the private rental sector currently, we’re still seeing very low longer-term confidence in the industry. It’s going to take more than a month or two’s bullish headlines before landlords start to feel that things have got better if in fact they have,’ said James Davis, Upad’s chief executive officer.
‘Though it’s helpful to have buy to let mortgage providers like Paragon back in the marketplace, landlords still face very real practical problems. A third of all landlords in the past 12 months have faced rent arrears, and keeping voids to a minimum must be a key concern in the current climate,’ he explained.
‘With cuts hitting all sectors of the economy hard, plus concerns about housing benefit changes and their knock on effects for the private sector, no one can afford to be complacent about their rental business,’ he added.