BTL landlords remaining positive

Posted: 18th Oct 2018

Various survey results indicate that most landlords continue to be positive about the prospects for their business in the years to come.

That is welcome, given that the last 12 months or so haven’t been particularly full of great news for the sector. Some had predicted that sentiment would turn negative as a result, but that hasn’t happened.

The backdrop

It has been a challenging past few years or so for landlords in terms of the news backdrop.

There doesn’t seem any point in going over the detail again but suffice it to say that a variety of things might have been expected to create some concern, including:

  • stamp duty changes;
  • tax relief changes;
  • revised standards for landlord portfolios and lending accordingly;
  • shorthold tenancy threats;
  • and of course, Brexit and its potential negative impact on house prices and housing demand that some are speculating about.

Yet against that perhaps unwelcome catalogue of events, various sentiment surveys have indicated that the morale and optimism of landlords continue to confound the more gloomy forecasts arising as a result of the above.

In fact, one survey showed that 52% of landlords continue to feel confident and positive about their business prospects.

Drivers of optimism

The inevitable question that must arise is – what is driving such a positive feeling?

The fact is that, notwithstanding the above factors, the demand for affordable rental accommodation continues to rise and may continue to do so over the period ahead.

True, the picture may vary slightly depending upon region but on the whole, people are still looking at renting as opposed to buying properties in many cases. In any business, when a provider sees a high demand for their products or services, that is going to generate a positive outlook.

Transformation of the market

Although it is difficult to quantify, another factor having an influence here might be the increased professionalism of the landlord sector.

Over recent years, terms such as “accidental landlord”, “occasional landlord” and “dinner-party landlord”, have all expressed the recognition that many landlords were not necessarily seeing this as their major professional activity.

Some sources maintain the view that some of the above changes have discouraged amateur landlords from entering into the business and persuaded others of the same type already operating there, to seek opportunities elsewhere.

Almost inevitably, people operating in any line of business who are not experienced professionals may be more volatile to negative fear-based sentiments than those with a longer track record of survival in the industry. So the increasing numbers of experienced professional landlords vis-a-vis amateurs might also be a factor in maintaining an overall positive outlook.

Summary

It’s possible to argue that market sentiment doesn’t really count for much and all that matters are the facts and figures on the day.

However, when professionals in a business take an objective look at where things are going and adopt a positive and optimistic stance in terms of their own perceptions for the future, that must be encouraging.

Of course, crystal-ball gazing is always a dangerous game. However, based upon current landlord perceptions, the future of the industry appears to be promising.