Its research says that 49% of landlords rate their outlook for rental yields to be good or very good in the third quarter, a 16% jump on the previous quarter, due to “more stable market and economic conditions”.  

The study adds that there was an 11% rise in the proportion of landlords who are confident in the prospects of their own lettings business.  

The general confidence of property investors in the private rented sector increased by 8% compared to the second quarter of the year, while expectations for capital gains climbed by 6%.  

It points out: “These figures mean that landlords are more confident about all aspects of letting, with the exception of capital gains, compared to the same period in 2022, particularly with respect to rental yields and their own lettings business.”  

Paragon Bank managing director of mortgages Richard Rowntree says: “Landlords play a vital role in the UK’s housing provision, so it is important that they feel confident in the investment environment, particularly at a time when demand continues to outstrip supply.   

“Although there is still work to be done on all sides as we work to improve the private rented sector for both tenants and landlords, we’re encouraged by signs that the value of private investment is being recognised by government.”  

Rowntree adds: “It’s also worth noting that this research was undertaken before it was announced that the removal of Section 21 would be delayed until court reforms and a new ground for possession for student landlords was created [announced in the King’s Speech on 7 November].   

“These are both significant changes to the Renter’s Reform Bill that will likely be welcomed by landlords so could add to the more positive outlook.”  

Paragon Bank’s study was carried out by data group BVA BDRC, which surveyed 785 landlords between 23 September and 13 October.