Many landlords have reviewed their portfolio sizes and increased rents in response to the ongoing political uncertainty in the UK, according to a new piece of research.
When asked how they had been influenced by the uncertainty since the European Union referendum and snap general election, some 38% of landlords said they had reviewed the size of their portfolios to ensure they could withstand any creeping costs.
The latest sentiment index from Foundation Home Loans also found that 7% have sold off properties to either reduce portfolio sizes or diversify, rising to 19% for those holding 20 properties or more as PRA policy change edges closer.
Some 30% have increased rental prices, with the greatest proportion doing so in the East Midlands at 41% as landlords recognise the popularity of the region for professionals seeking the balance of space alongside proximity to London.
However, confidence in tenant demand in the East Midlands has not been enough to deflect from the wider pressures bought on by tax and policy changes, as it was also the region with the highest proportion of landlords reviewing the size of their portfolios at 50%.
Landlords with properties in central and outer London followed closely behind at 45% and 40% respectively and the North West, South East and East of England also saw high percentages of landlords raising their rents at 35%, 33% and 33% respectively.
The report said it was significant that 24% of landlords in central and outer London raised their rent prices, increasing the pressure on those still hoping to afford home ownership while 71% of landlords said they had experienced a drop in confidence, rising to 78% in central London and 77% in outer London, reflecting the cooling London market and decreasing tenant demand.
‘Landlords have been met with a raft of changes, from stamp duty charges to shifts in tax policy, and the lack of certainty on the political front has clouded the picture somewhat. The response has been to streamline larger portfolios and protect income by increasing rents,’ said Jeff Knight, marketing director at Foundation Home Loans.
‘The fact remains that, whether it’s as a stepping stone to home ownership or a longer term lifestyle decision for tenants, the rental sector is an increasingly important part of the housing mix. This will ultimately be best served by a wide choice of property, and good landlords who can have confidence in decent returns,’ he added.
Mortgages – Find cheapest rates from 0.98%