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Landlord confidence in the buy to let investment sector has still not been fully restored according to research from BM Solutions.

Landlord confidence levels have remained largely stable on a quarterly basis in areas that include rental yields, capital gains and their own lettings business.

However, the most significant change in landlord confidence was surrounding the short term prospects for UK financial markets. An 11 per cent drop in confidence was evident in the survey.

Landlords were also of the opinion that tenant demand is on the decline. A mere three UK regions, comprising of Scotland, the East of England and outer London, showed an increase in demand in comparison to the fourth quarter of 2017. Across the other nine UK regions, demand from tenants was lower in comparison to the end of 2017.

During the first quarter of 2018, rental yields dropped slightly to 5.8 per cent. This is down from 5.9 per cent in quarter four.

The highest rental yields were generated in the North West at 6.7 per cent. These were closely followed by the West Midlands at 6.6 per cent and the East Midlands at 6.2 per cent.

BM Solutions head Phil Rickards commented on the findings: ‘After the new underwriting standards came in at the back end of last year, it’s encouraging to see landlords starting 2018 on a more optimistic note particularly around their own business and rental yields. While overall confidence in the UK’s financial markets is 11 per cent lower than a year ago and we’re still working through a period of landmark changes in the industry, there are clear signs of good health, as more than eight out of 10 landlords are telling us they are making a good profit from their business.’

BM Solutions quarterly research is carried out with market researcher BDRC. It is based upon 1,043 interviews with landlords.

Source: Residential Landlord

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