Despite the prospect of high yields and profitability, a survey has revealed the landlord confidence around the UK has fallen.
The findings from BM Solutions looked at all the key indicators for the second quarter of 2017.
They say that the level of landlords’ confidence is now at an all-time low - falling by 5%.
However, despite this fall in confidence, the profitability among landlords has remained high with 86% saying they are making money from their rental properties.
Also, around one in three landlords are generating a living from their portfolio and 55% are using their rental income to help supplement their earnings.
Landlords hoping to expand their portfolio
The number of landlords hoping to expand portfolios has edged up to 15% from the previous 13% which was an all-time low.
Despite this, 20% of landlords say they are looking to reduce their portfolio numbers with those owning more than 11 properties being likely to offload homes.
The findings also show that demand from tenants has fallen slightly with 19% of landlords saying demand has declined.
The head of BM Solutions, Phil Rickards, said: “Landlords feel gloomier and we know that some say it is difficult adjusting to tax changes and it’s landlords with a portfolio of more than 11 properties are likely to reduce the number they own over the coming year.
“The quarter also highlights a decline in tenant demand and fewer landlords intending to raise rents and against this with profits remaining high, rental yields have also edged up to 6% from the first quarter.”
Landlords reveal biggest fears
Meanwhile, a survey of landlords has asked them what their biggest fears are for the future and it's not Brexit with the number one concern being taxation and economic uncertainty.
That's because, the researchers from landlord insurance firm Direct Line for Business, found that the impact of tax relief changes is now making more landlords worry.
They also found that regulation is a concern for 40% and many are increasingly nervous about the growing risk of prosecution and higher penalties.
Among these, are worries about prosecution under the Immigration Act as they may not have checked their tenants ‘Right to Rent’ which could lead to criminal prosecution and a potential five years in prison.
A spokesman for Direct Line for Business said: “Landlords are being resilient towards an ever-changing property market and its positive to hear they do not appear to worry about Brexit and the impact on demand.”
