Landlord confidence again fell in the second quarter of 2022.
Having reached highs at the end of 2021, landlords are starting to feel nervous yet again, with 17% of landlords saying they had reduced their holdings over the last year, whilst 30% of landlords said they plan to do so over the next twelve months.
The last time confidence was more brittle was right at the start of the pandemic in Quarter 1 of 2020.
This loss of confidence can be put down to a numbr of factors, which include long standing issues such as the threat of regulatory changes (removal of Section 21) and the ongoing impact of the loss of Mortgage Interest Relief.
And there are other fast-rising concerns and threats. Rising interest rates and the rising cost of property maintenance have both moved further up the list of landlord concerns during 2022. The prospect of having to invest in energy efficiency measures to meet any revised Government target, is a final pressure weighing heavily on landlords.
Note that the fieldwork for this study was undertaken before the announcement of the Government White Paper on the private rented sector, and so the trend of declining confidence is set to continue.
Even though more landlords are noticing rising demand for rented property and fewer than 10% of landlords find their property empty for ten weeks or longer between tenancies, more than 50% (56%) of landlords held, or reduced rents over the last twelve months.
This is why rent increases across the PRS are much lower than those reported by rental agencies. But this is becoming line which landlords are now finding increasingly difficult to hold onto. This proportion is itself declining as costs rise.
Whilst the costs landlords face continue to increase, it is inevitable rents will too. This will only be exacerbated should the supply of PRS housing also begin to fall.