The majority of buy-to-let investors are feeling less confident as a result of the November Budget and Renters Rights Act, which will become law from May, according to Savills’ latest survey of landlords.
“A fundamental reset of the rental market is underway, reshaping the experience of both landlords and tenants,” said Jessica Tomlinson, research analyst at Savills. “While those operating within the sector do still have time to prepare for regulatory changes, a shift in sentiment is already being felt.”
A fall in landlord confidence has coincided with a realignment between landlord and tenant on rental value expectations.
The majority of agents across the prime rental markets agreed that tenants expected rents to fall over the last three months. This compares to 50% who believed landlords expected rental falls in prime central London, and 2 in 5 across prime regional markets.
However, just one in five agreed in outer prime London, where the gap in rental price expectations remains the widest.
“A number of landlords may seek to reassess their position once the Act becomes reality. But, others will stand their ground and seek to get up to speed on how these changes will cause the lettings market to evolve.”