Landlord confidence has reached a 15-year low, as only 23% now express optimism about their business prospects. This represents a sharp decline from 63% in 2011, even though financial performance remains strong. Research shows 85% of landlords reported profits in 2023, a slight decrease from 82% in 2011. Rental arrears have also fallen from 50% to 28%, while average rental yields held steady at 6.4%, compared to 6.7% in 2011.
The decline in optimism contrasts sharply with the sector’s financial health. While profitability persists, regulatory pressures appear to be weighing on landlords’ outlook. This suggests concerns about future policy shifts rather than immediate financial difficulties.
The average landlord age has risen to 63, up from 56 in 2011, and portfolio sizes have shrunk from an average of 11.8 properties to 8. Fewer landlords now depend on buy-to-let mortgages, with the average number dropping from 8.8 to 5.9. Meanwhile, outright ownership has increased from 25% to 43%, indicating a more cautious and risk-averse approach. These changes also reflect the sector’s growing professionalization.
Only 25% of landlords now view their role positively, down from 77% in 2011, and just 2% believe landlords are respected—a decline from 7% a decade ago. Nearly 9 in 10 say running a rental business has become harder, up from 66% in 2011. Additionally, the share of landlords who say letting property allows them to earn a living has fallen from 62% to 48%, showing a widening gap between financial success and perceived value in the sector.
Ownership structures have also evolved, with 24% of landlords now holding at least one property in a limited company, up from 17% in late 2020. Among those with incorporated properties, the average number held in a company has increased from 7.6 to 12.7, accounting for 75% of their portfolios compared to 57% six years ago. This shift reflects efforts to reduce tax and regulatory exposure.
Bethan Cooke, Director of Pegasus Insight, linked the decline in confidence to prolonged policy uncertainty. She highlighted George Osborne’s 2015 restrictions on mortgage interest tax relief as a key turning point, with later changes reinforcing landlords’ sense of being undervalued. “Successive Conservative and Labour governments have left landlords feeling that their contribution is undervalued and wondering where the next additional cost or obligation will come from,” she said.