Landlord confidence has collapsed to all-time low

Landlords’ confidence in the buy-to-let sector is now ‘worse than levels witnessed during the financial crash’ according to Richard Lambert, CEO of the National Landlords Association (NLA).

Richard Lambert told delegates at the Building Societies Association’s (BSA) annual get together for mortgage professionals that confidence in landlords' business expectations has dramatically fallen by more than a third over the past year, now sitting at a an all-time low of 43%.

Mr Lambert also outlined how the actions taken by the Chancellor regarding last year’s Summer Budget and Autumn Statement have led to the NLA reversing its previous outlook that stated the private rented sector (PRS) would continue to grow with another million more households over the next five years.

It now forecasts that if landlords are to follow through with their intentions then the buy-to-let market could face a huge shake up. The result being a dramatic sell-off of 500,000 properties in the next 12 months followed by another 100,000 properties sold each year up until 2021. The end result will be that the PRS market will be smaller by up to 136,000 properties.

The findings from the latest NLA Quarterly Landlord Panel survey show for some interesting reading. The proportion of landlords that are now looking to sell in the next 12 months has more than doubled since July last year, now standing at 19%.

Additionally, a significant proportion of landlords (28%) stated that they don’t plan to purchase any more properties and 10% plan to actually reduce their portfolio.

Mr Lambert remarked “Up to half a million properties could come onto the market as a result of the Summer Budget and Autumn Statement, which the Chancellor will no doubt deem a success. But there is no guarantee that these will be the one or two-bedroom flats or small houses that will appeal to first time buyers, especially as landlords are more likely to offload less desirable stock in less desirable areas.”

Only time will tell in order to see what the impact of these changes announced by the Chancellor will have on the buy-to-let market.

If you have any queries about how these changes could affect you, please don’t hesitate to contact Orchard & Shipman today. As a company with over 25 years’ experience dealing with private landlords, our team of experts understand the impact a change in government policy can have. We’re readily available to guide and advise you through these sometimes confusing changes in legislation.