Landlords are optimistic about the PRS despite challenges – NRLA

Landlord confidence in the private rented sector (PRS) rose significantly in the third quarter of 2023 after hitting record lows, according to the National Residential Landlords Association (NRLA).

The NRLA’s confidence index, which measures landlords’ views on the prospects of their own lettings business and the wider rental market, increased by 7.9 percentage points from the previous quarter, one of the biggest jumps since the index started.

The organisation says the boost in confidence is down to several factors, including the Government’s decision to scrap the proposed minimum energy efficiency certificate (EPC) rating of C for rented properties, the drop in inflation and the announcement by Housing Secretary Michael Gove that Section 21 evictions will not be abolished until the courts are reformed.

‘Increasing confidence is most notable in Wales’

The report states: “Increasing confidence is most notable in Wales where confidence has previously been hovering at record lows since 2022 Qtr 3.

“This short-term shift in confidence has yet to translate into longer term planning, with plans to buy and sell still at the lows and highs previously recorded.”

It adds: “Landlords are supportive of the idea of a Property Portal as a ‘central hub’ for guidance and compliance documentation. The aim is for the Portal to function as a ‘one stop shop’.

“Landlords will be able to access guidance and understand their obligations through the portal.

“At the same time tenants can access information about their rights as well as a property.”

Did not translate into more positive actions by landlords

The increase in confidence was seen across all regions but it did not translate into more positive actions by landlords with the proportion planning to buy more properties stuck at record low levels.

The proportion who planned to sell some or all their properties was slightly below record high levels.

The NRLA’s Q3 survey also explored landlords’ views on other issues, such as their tax arrangements, energy efficiency plans and the Government’s proposal for a new property portal under the Renters (Reform) Bill.

The survey found that Capital Gains Tax was a major obstacle for landlords, with 45% of respondents saying it had influenced them to keep their properties for longer than they originally intended when they became landlords.

Landlords who had properties with an EPC rating of D

On energy efficiency, the survey revealed that more than half of the landlords who had properties with an EPC rating of D or lower would either sell some or all of their properties or leave the sector altogether if the Government reintroduced the minimum C rating requirement.

The survey also showed that 85% of landlords supported the NRLA’s call for financial assistance for landlords to make energy efficiency improvements, saying it was essential for raising standards.

Regarding the Property Portal, the survey found mixed opinions among landlords with most landlords agreeing that the portal could be a useful tool for providing compliance information and guidance to landlords and tenants.

However, some landlords expressed doubts about its effectiveness and whether it would be better than the current method of giving information directly to tenants.

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