BTL investors remain confident despite policy uncertainty

The UK’s private rented sector (PRS) continues to attract investors despite some uncertainty surrounding future government policies, research reveals.

According to a report by Connells Group, which analysed data from the second quarter, there has been a 6% increase in new instructions compared to the same period last year.

The number of instructions last month was the highest since July 2020, which highlights growing confidence among buy to let investors, the firm says.

However, while tenant demand eased slightly, the increased availability of properties coupled with steady demand resulted in a 3% rise in tenancies agreed compared to the second quarter of last year.

Average monthly agreed rent

The average monthly agreed rent across the UK also rose by 6% to £1,464, although the overall growth rate slowed down due to increasing stock levels.

Connells Group lettings’ chief executive, Stephen Nation, said: “We’re buoyed by the activity we’ve seen during the second quarter of this year which demonstrates that, despite some uncertainty surrounding policies in the sector, confidence from investors is on the increase.

“We’re pleased to see more instructions, more tenancies agreed and more landlords staying with us, contributing to an overall positive outlook as we look towards the latter half of the year.”

Growth in re-lets

Along with a rise in the number of agreed tenancies, Connells also points to a growth in re-lets which remained above 70%.

Across Connells Group, tenant demand eased by 2%.

The firm also says that in the South East and the Midlands both saw a decline in rent values in June, whereas in Scotland and northern England, and in the East, rental values rose.

James Thornett, Connell Group’s PRS director, said: “The UK private rented sector is offering solid returns for investors, and our recent data supports this.

“We continue to see corporate investors and institutional capital enter the market, generally viewing it as part of a long-term strategy which will generate stable returns.”