Landlords are confident about the future of the property market and their rental properties, according to a survey by The Mortgage Lender (TML).
The survey found that 74% of landlords were confident about the property market over the next 12 months, with 27% feeling very confident.
The confidence was highest among landlords who mainly owned homes of multiple occupancy (HMOs) (86%), student accommodation (84%) and portfolio landlords with more than five properties (82%).
'Encouraging to see these levels of confidence'
Chris Kirby, TML's head of key accounts, said: "Given the pivotal role that the BTL industry plays in supporting the residential market and ensuring the maintenance of the much-needed supply of homes, it's encouraging to see these levels of confidence.
"Despite the fact that many landlords are facing higher operating costs, and additional to the inflationary pressures that are impacting everyone, the continued supply of good quality, well maintained rental properties is a must."
TML's survey also shows that 71% of landlords were confident about the performance of their rental properties over the next 12 months, with portfolio landlords being the most positive (78%).
Landlords who had been renting out properties for more than five years were more confident than those with less experience (73% vs 69%), as they had experienced different economic cycles.
High confidence levels down to strong tenant demand
The survey attributed the high confidence levels to the strong tenant demand, which was driven by the critical role of buy to let (BTL) in the residential market.
TML says that 73% of landlords had seen an increase in tenant demand over the last six months, with 27% saying it had been a significant increase.
The increased demand and the wider economic market had also affected rents, as 73% of landlords had raised their rents over the last 12 months, with the average increase being 34% among those surveyed.
The survey also found that 52% of landlords had increased rents to cope with their own rising costs, while 28% had followed the trend of other rental properties in the area where asking rents had gone up.
The survey concluded that landlords were optimistic about the property market and their rental properties and expected the demand and rents to remain high.
Landlords are concerned about the future of the rental sector
Meanwhile, a survey by Zero Deposit found that landlords in England and Wales are concerned about the future of the rental sector – especially the end of Section 21 evictions, which they fear the most for 2024.
The survey polled 1,042 landlords, most of whom (89%) own one to three properties for rent.
It reveals that only 21% of landlords have a positive outlook for the rental market in the coming year, while 24% have a negative one and 55% are indifferent.
Regarding their rent plans for the new year, 24% of landlords plan to raise rents, while 68% plan to keep them the same, and 8% plan to lower them.
Top challenge for landlords in 2024
The top challenge for landlords in 2024 the Zero Deposit survey found is the cost of upkeep, repairs and management of their properties, followed by changes in the law.
Another major challenge is finding and keeping good tenants, as well as dealing with higher interest rates for mortgages.
However, the abolition of Section 21 'no-fault' evictions is the biggest fear for landlords in 2024.
Sam Reynolds, the firm's chief executive, said: "It's clear that the Renters (Reform) Bill and the abolition of Section 21 evictions, in particular, remain a concern for many landlords.
"It's seen as fundamental to protecting their property when significant issues arise and with so many factors now working against them, many landlords have reached their tipping point and have exited the market."
'Landlords are optimistic for 2024'
Simon Thompson, the managing director of Accommodation for Students, said: "A new year is usually a stepping off point for optimism and it's great to see many landlords are optimistic for 2024.
"That's particularly true for student landlords who perhaps have more to worry about with the Renters (Reform) Bill and the introduction of periodic tenancies.
"There's no doubt that the PRS has a crucial role to play in delivering homes for people to rent but the second survey highlights other worries."
He added: "It reveals a similar ratio of worried landlords, and the potential impact of abolishing Section 21 'no-fault' evictions might have a much bigger impact on the PRS than many of us realise."
