The survey, conducted as part of ‘Kensington Mortgage’ According to the BTL Barometer, 84% of landlords expect higher yields in the coming year, as well as positive sentiment towards the broader rental market.
Overall, 89% of respondents said they are confident about the region’s outlook, while 80% expect rental demand to increase and 77% anticipate property prices will rise.
Despite this, landlords continue to report rising costs and pressure from regulation. More than three-quarters (77%) expect mortgage costs to rise, while 81% say their operating costs – including repairs, insurance, utilities and maintenance – have increased in the past year. Additionally, 79% believe the regulatory environment will become more challenging.
Interest rates were identified as the most important factor shaping confidence (31%), followed by regulation (26%), asset prices (25%) and rental demand (25%). The macroeconomic outlook and mortgage availability were cited by 22% of respondents, while taxation was highlighted by 20%.
Against this backdrop, most landlords are maintaining or expanding their portfolios. More than half (53%) plan to keep portfolio size unchanged over the next 12 months, while 38% intend to increase their holdings. A smaller proportion (8%) are considering reducing risk. The majority (74%) also reported that they currently find it easier to access mortgage finance than buy to let.
The research also sheds light on the portfolio structure among limited company landlords. More than half (53%) hold their entire portfolio within a limited company structure. Among those with both limited company and individual holdings, the average gross rental yield for limited company properties was reported to be 5.04%, compared to 4.88% for individually held properties.
In terms of property type, family homes remain the most common (40%), followed by large HMOs (35%), single-tenant properties (33%), and small HMOs (27%). Holiday lets (16%) and student accommodation (12%) are less commonly held.
Recent activity suggests a continued focus on prime residential stock, with landlords frequently adding family homes (21%), single-tenant properties (20%) and large HMOs (16%) to their portfolios in recent years.
Looking ahead, 95% of respondents said they are considering diversification across different types of assets. Corporate lets were the most commonly cited target (37%), followed by large HMOs (18%), family homes (17%) and single-tenant properties (13%).