Landlords optimistic about PRS performance in 2024

Three-quarters (74%) of residential buy to let landlords say they are confident about the performance of the private rented sector (PRS) over the next 12 months, a survey reveals.

The findings from The Mortgage Lender (TML) also found that 27% of landlords felt very confident about the sector’s future.

The survey reveals that landlords who predominantly owned homes of multiple occupancy (HMOs) were the most optimistic (86%) about the future of the PRS.

Student accommodation landlords and portfolio landlords with more than five properties also expressed high levels of confidence, at 84% and 82%, respectively.

‘The pivotal role that the BTL industry plays’

TML’s head of key accounts and specialist distribution, Chris Kirby, said: “Given the pivotal role that the BTL industry plays in supporting the residential market and ensuring the maintenance of the much-needed supply of homes, it’s encouraging to see these levels of confidence.

“Despite the fact that many landlords are facing higher operating costs, and additional to the inflationary pressures that are impacting everyone, the continued supply of good quality, well maintained rental properties is a must.”

Performance of their own rental properties

When it came to the performance of their own rental properties over the next 12 months, 71% of landlords felt confident, with portfolio landlords feeling the most confident at 78%.

The survey also found that landlords with more than five years of experience were more likely to feel confident about their portfolios over the next 12 months compared to those with less experience (73% vs 69%).

TML puts this optimism down to those landlords having ‘weathered a number of economic cycles’.

Demand from tenants increased over the last six months

Tenant demand has remained buoyant, helping to keep these confidence levels up with 73% of landlords saying that demand from tenants increased over the last six months, with 27% saying it had been a significant increase.

This increased demand and the wider economic market is also impacting rent prices, with 73% of landlords reporting that they have increased their rents over the last 12 months, with the average going up by 34% amongst those surveyed.

And 52% said they had increased rents to keep up with the increase in their own rising costs, while a further 28% were following the lead of other properties in the area where asking rents had increased.