Even before the Chancellor announced fresh measures to clamp down on buy-to-let landlords in the Autumn Statement confidence within the sector had plummeted, BM Solutions has found.
In the third quarter of 2015 25% more landlords were confident in the financial markets than not, down from 37% in the second quarter. Similarly a net 34% were confident in the state of the private rental sector compared to 59% in the second quarter.
In the July Budget the government announced plans to clamp down on the mortgage tax relief higher rate taxpayers can claim back, while last month George Osborne announced that Buy-to-let landlords will have to pay a 3% stamp duty surcharge from April.
The buy-to-let market is expected to see a boom and bust before April.
Phil Rickards, head of BM Solutions, said: “There has clearly been a spotlight shining on the Buy-to-Let market and Private Rental Sector for most of 2015.
“Landlord confidence in the outlooks for the private rental sector as a whole and landlord’s own lettings business have seen statistically significant declines when benchmarked against Q3 2014.
“However, the market is still holding up, and at the same time four in 10 landlords report demand has increased in the areas where they hold properties during the last quarter, and yields remain strong.
“There’s no doubting 2016 looks like a challenging year ahead however I take comfort in the fact there’s still a need for a strong private rental sector along with good quality housing to support demand.”
Despite the negativity three in five (61%) landlords intended to live off the rental income in retirement, although one in three others (36%) said they will make a decision based on the market when they reach retirement.
Tenant demand remained strong in the third quarter, particularly in the East of England where 52% of landlords reported increased demand in the last three months.