Around 85% of landlords are still making a profit from their portfolios, according to new research from Aldermore.
The research shows that 6% are making losses, but many landlords are nervous about the future and the impact of the Renters’ Rights Act, which will be phased in from May.
The results of the poll by Pegasus Insight on behalf of the lender show that 75% of landlords believe the law will have a negative impact on them personally and 84% believe it will harm the private rental sector more broadly.
Looking in more detail at landlords’ biggest concerns about the law, 91% fear backlogs in the legal system when evicting tenants, while 88% worry about the impact of the income tax increase on the rental income of landlords who hold properties in their own names.
The research shows that 84% of landlords say they have to be more selective when it comes to tenants because of the reforms, and that 72% are considering rent increases.
Rental yield expectations have fallen to their lowest level in five years and the share of landlords reporting strong tenant demand has fallen to 61%, down 7 percentage points from the previous quarter and down 16 percentage points year-on-year.
Jon Cooper, mortgage director at Aldermore, said: “What is clear from the research is that most landlords have legitimate concerns about the impact of the Renters’ Rights Act on their property portfolios.
“It is critical that all landlords assess how the law will impact their rental activities, to protect themselves and ensure they can continue to provide a positive rental experience for their tenants.”
Kuiper adds: “The sector faces challenges, but landlords are very resilient.
“They are also a cornerstone of the UK housing supply.”