Autumn Budget dents landlord confidence but buy to let activity continues

Four in 10 landlords say they feel negative about the outlook for their buy to let businesses following the Autumn Budget but remain active in the sector, research suggests.

The findings are in the first revamped landlord survey from Landbay which says landlords are adjusting to various pressures to maintain their business.

Carried out at the end of December and the start of January, most landlords described themselves as either positive or neutral about their BTL activity.

Landbay says this shows a willingness to plan and respond to change, even as confidence took a knock late last year.

Landlords are realistic

The lender’s sales and distribution director, Rob Stanton, said: “The results of this new iteration of our survey show landlords are incredibly realistic about the current pressures in the sector, particularly around tax and regulation, but also that they are actively engaged with the market, and looking for ways to improve the performance of their portfolios.

“Landlords were not enamoured of the Budget – that is obvious – but they are taking steps to mitigate against measures which may increase their costs, and many plan to add to portfolios, shift ownership structure, and raise rents, in order to ensure they remain profitable.”

He added: “One of the key takeaways, however, is just how many landlords are carrying higher-rate mortgages arranged when pricing was less favourable.

“The good news here is that over the past six months in particular, pricing has shifted considerably, and advisers are likely to be able to secure some considerable savings for those borrowers coming up to remortgage.”

RRA has an impact

Tax and regulation continue to shape landlord expectations with new obligations under the Renters’ Rights Act weighing on decisions.

The 2% property income tax rise due in 2027 is also an issue for landlords considering the future of their portfolios and longer-term PRS investment.

Almost half of respondents said they do not currently plan to buy or sell property over the next 12 months.

Around a third expect to do so, while others are still weighing up options.

Looking to incorporate

Among those planning changes, restructuring is a common theme with many expecting to review ownership structures.

That includes moving property held in personal names into limited companies.

Most landlords also said rents would rise broadly in line with inflation or only slightly above, reflecting uncertainty around future costs and compliance demands.

Mortgage pricing emerged as a key issue and more than a third of landlords said the rate on their most recent buy to let mortgage exceeded 5%.

Landbay says these reflected deals agreed during the peak of the rate cycle.

Looking ahead, stability is the priority and five-year fixed BTL mortgage rates were the most popular choice when landlords were asked about their next remortgage.