Richard Lambert, CEO of the National Landlords Association (NLA), has warned that landlord confidence in the private rented sector has fallen to an all-time low, lower even than the levels recorded during the financial crash of 2007. He told delegates at the Building Societies Association’s annual conference that landlords’ business expectations had collapsed by a third over the past 12 months – from 67% to 43%.
As a result of Chancellor George Osborne’s Summer Budget and Autumn Statements in 2015, the NLA now believe that there could be a massive sell-off of up to half a million properties in 2016, followed by a further 100,000 each year to 2021. The net effect in this scenario would see a private rented sector that is 136,000 properties smaller in five years than it is today.
According to the NLA’s latest Quarterly Landlord Panel survey, the proportion of landlords looking to sell has more than doubled since July 2015 (going from 7% to 19%). It also showed that 28% of landlords have no intention of adding properties to their portfolio in the near future, 10% plan to reduce their portfolio, and 5% plan to sell-up completely.
Although this might help achieve the government’s aim of increasing owner occupation, there will still be increasing demand for rental property. It remains to be seen whether large-scale institutional investment in build-to-rent will be able to keep up.