A quarter of landlords based in central London said they had reduced their rents over the past year, with factors including Brexit uncertainty meaning tenant demand was lower in the capital.
London is the most likely place to have seen landlords reduce their rents than anywhere else in the country, a new Paragon survey has revealed through a study looking at 1,043 buy-to-let investors over the past 12 months.
Overall, landlord confidence in the market nationally remained robust, but London was by far the least optimistic place for property investors, with only 26% of London landlords saying their prospects for their business were as good or very good over the next three months.
At the other end of the scale, landlords in the east of England had the most positive outlook, with 53% saying they were upbeat about their lettings over the next three months, while 83% said that rental demand was either stable or increasing. The midlands also saw increased optimism compared to the previous three months due to the growing demand from tenants there.
The figures are encouraging
John Heron, managing director of mortgages at Paragon, said: “After an unprecedented level of change, it’s encouraging to see landlord confidence stabilising this quarter. At a regional level, the east of England and the midlands look well supported, with encouraging data on tenant demand, yield and capital gains while the London market adjusts its footing after many years of strong growth.”
One of the major factors that could be affecting investor confidence in London is Brexit, and separate research from the National Landlords Association (NLA) revealed that 14% of landlords in central London had lowered their rates over the past 12 months.
Richard Blanco, the London representative for NLA, said: “Uncertainty over Brexit means that tenants are less likely to move and commit to 12 month contracts and we have seen a glut of properties coming onto the market,” said Blanco. “I have experienced longer voids and downward pressure on rents. ONS stats confirm that rents rose only 0.1% in the 12 months to March 2018 in Greater London.”