Almost three-quarters of landlords have not seen any change in the value of their portfolios, which has prompted more than half of them to “sit tight” on their assets in the current high interest rate market, data from Sourced Franchise shows. 

The property investment platform reports that 71% of landlords say they have not seen the value of their investments fall since interest rates began their run of 14 consecutive rises in December 2021. 

Private landlords have coped with rising mortgage costs by passing these onto tenants who are trapped by tight rental supply.

The average cost of rent in England jumped 19% hitting a record £1,367 per property in July compared to the previous month, according to research from letting agent Goodlord earlier this month.     

Over the last five years, 89% of landlords say they have seen a return from their portfolio, “demonstrating the strength and consistency of UK real estate,” continues Sourced Franchise. 

It adds: “But while the majority of investors are confident in the performance of their current portfolio, they are also treading with caution over future investments.” 

The firm’s poll says that 55% of landlords surveyed say they will be “sitting tight, neither increasing, nor decreasing the size of their portfolio this year, while a further 29% are waiting to see how things play out before making further investments”. 

The Bank of England lifted its base rate again by 25bps to 5.25% earlier this month, its highest level for 15 years.        

The central bank is battling inflation, which this month dropped to 6.8% in the year to July from 7.9% in June, but still remains almost three-and-a-half times higher than its 2% target.         

Markets are betting that the central bank will raise the base rate to around 6% by the end of the year, before beginning to fall in 2024.  

However, lenders have already seen swap rates retreat from their early July peak, allowing many of them to cut rates.        

When landlords were asked about their forecasts for property prices over the coming 12 months, 52% believe house prices will fall back but only marginally and at a gradual pace.  

Another 29% think the market will continue to tread water with no significant change, 13% expect a crash of £30,000 or more, while 6% predict a rally.   

Sourced Franchise director Chris Kirkwood says: “Confidence among investors remains largely unwavering and despite the wider economic picture, the resilient nature of the property market has meant that the majority are yet to see any negative impact to the value of their bricks and mortar portfolio. 

“While the rest of this year is being viewed with perhaps a greater degree of caution, the overarching opinion is that the market will remain there or thereabouts, with no meaningful reduction in property values on the cards.  

Sourced Franchise’s online poll was conducted by data platform Find Out Now, which contacted 1,113 UK property investors on 11 August.