Landlord Confidence Index: Quarter 3 round-up

Welcome to our latest Landlord Confidence Index (LCI) round-up for Quarter 3, where we’ll look at the main factors impacting the business decisions you as landlords, are making. 

Data is gathered via our quarterly surveys and used to provide evidence to support our lobbying work. 

We’re currently in the midst of unprecedented circumstances around the world, which has naturally impacted huge proportions of the population, including many landlords and tenants. At a time of great uncertainty, incomes are decreasing more significantly than ever  

So you might be surprised to hear that there is an area in England and Wales where landlord confidence has grown from Quarter 2! The South West as a region, has seen sustained rental price growth throughout 2019 and 2020, a trend which shows no sign of slowing. 

Less surprising is the fact that across the country, landlord confidence has fallen dramatically since Q2, with both inner and outer London among the least confident regions. The national lockdown earlier this year has already led to changing attitudes relating to how and where we work, and it’s possible that high demand in cities and typical commuter towns is set to change long-term. 

There are likely many reasons for such a drop in landlord confidence, but a key theme throughout the pandemic is the feeling that landlords seem to have slipped through the net, in terms of financial support available. Where consideration has been given to many sectors, it would be fair to say the options available for landlords are limited if even applicable.  

Add to that the months long stay on evictions, and now further requirements for gaining possession, and such a drop off in confidence is surely to be expected. 

While tenant demand has increased overall from the previous 3 months, the 10% increase likely reflects the reopening of the letting industry following the nationwide lockdown, so it remains to be seen what the long-term effects are. 

A key factor to note in Q3 is the change in attitude to rent setting and increasing, demonstrating how landlords have quickly adapted to the conditions created by the pandemic. The index shows there has been a dramatic increase in the number of landlords who will freeze or even lower rents over the next 12 months. The survey data reveals such decisions have been taken due to ongoing uncertainty over the economic impact of Covid-19 and increasing unease with property market conditions. 

Concern about the future of the economy is widespread in general and is impacting landlords when making decisions related to portfolios. Our research shows a 20% increase in those who are looking to sell since Q2 with the gap between buying and selling widening again. This again contradicts the narrative that changes to Stamp Duty would simply mean landlords would use the opportunity to increase portfolios.  

Whatever the public perception may be, our data concludes that many landlords are suffering reduced incomes, and the lack of financial support available is further impacting those affected. In times of such great uncertainty, and without recognition of the problems faced, such as rent arrears and anti-social behaviour, landlords will be leaving the market in even greater numbers than ever.  

Covid-19 and the impact of the pandemic has already seen the decimation of certain sectors. If the government fail to provide appropriate support, the future of the private rented sector is a very worrying prospect for many landlords.

• To read the Landlord Confidence Index in full, click here.