Just 12% of landlords are looking to expand their portfolios – an all-time low.
BM Solutions research found that 17% of landlords are confident in the state of the UK’s financial markets, down from 20% in Q4 2016.
Tenant demand for properties is at a 5-year low – with landlords in London, the North East and the South East all reporting falling demand.
Demand still increased in Scotland, the East Midlands and the South West.
Phil Rickards, head of BM Solutions, said: “At the end of 2017 landlords were less confident than in the previous year, especially in terms of their own letting business – this is to be expected given the volume of change they’ve experienced.
“We have more recently seen the introduction of new portfolio rules in 2017 which will also have started to impact the proportion of landlords looking to expand their portfolio in the next year, while the market adjusts to further change.
“Having said all of this, profitability still remains strong, with a healthy 86% of landlords making a profit and the average rental yield remaining stable.”
The average rental yield in the fourth quarter is relatively stable at 5.9%.
Landlords in the North West generated the highest rental yield of 6.7%, followed by South West (6.2%), East Midlands and North East (both 6.1%).
Those in London (outer) achieved the lowest yield of 5.0%.