As part of research carried out on behalf of Paragon Bank by BVA BDRC, landlords were asked to rate their expectations for rental yields, their own lettings business, capital gains, the private rental sector, and the UK financial market.
The proportion who deemed the outlook for these measures to be either ‘good’ or ‘very good’ exceeded levels seen in Q3 2016, the survey taken just before the Brexit vote, with investor optimism consistently rising following the record low levels seen in Q1 2020.
The survey also highlighted a link between optimism and portfolio size, as 56% of landlords with 11 or more properties felt ‘good’ or ‘very good’, but this fell to 46% amongst those with between one and 10 properties.
A positive outlook was noted among 63% of those who had recently purchased a property, compared to 48% of all respondents.
More than three-quarters (78%) of landlords who planned to expand their lettings business in the next year were optimistic, whereas confidence was seen in a lower proportion (26%) among those looking to divest.
Richard Rowntree, managing director for mortgages at Paragon Banking Group, said: “Understandably, landlord confidence fell sharply in the first quarter of 2020, as the extent of the pandemic became clear.
“It is fantastic to see optimism bounce back and rise in the time since; it is an indication of the strength of the sector.
“Landlords see the sector’s issues and opportunities on a daily basis so measuring their outlook can provide useful insight for the industry and, as we see here, investor confidence can have a real impact on behaviour.”
