Landlords’ financial performance and confidence are moving in opposite directions, according to new research, which finds that they’re also increasingly older with smaller and less heavily mortgaged portfolios.

Pegasus Insight found that just 23% of landlords are confident about the prospects for their own letting business, compared with 63% in 2011. Yet 85% report making a profit, up from 82%, while the proportion experiencing rental arrears has fallen from 50% to 28%.

The findings - based on a poll of 585 NRLA members – reveal landlords’ relationship with the sector has worsened dramatically. Only 25% feel positive about being a landlord - down from 77% in 2011 - while just 2% believe landlords are respected, compared with 7% previously.

Almost nine in ten (89%) say being a landlord has become harder in recent years, up from 66% in 2011. Meanwhile, the proportion saying it allows them to earn a living has fallen from 62% to 48%, highlighting the distinction between reporting a profit and feeling that letting property provides a worthwhile livelihood.

Demographic

The research also reveals a changing landlord demographic. The average landlord is now 63, compared with 56 in 2011, and the average portfolio size has fallen from 11.8 properties to eight. Meanwhile, the average number of buy-to-let mortgages has dropped from 8.8 to 5.9, and the proportion of landlords owning their entire portfolios outright has risen from 25% to 43%.

Limited company ownership has also become more widespread as Pegasus says almost a quarter of landlords (24%) hold at least one property in a limited company, up from 17% in Q3 2020.

Successive

Director Bethan Cooke believes 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.

“A landlord can run a profitable business and still decide that further investment is no longer worth the uncertainty or effort,” she adds. “That is the risk these findings expose. With housing already in short supply, we need an environment in which responsible landlords feel confident about continuing to provide homes.”

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