2015 started very strong for UK landlords

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Just three in 10 landlords had experienced a void period in Q4 and a similar figure (32 per cent) had faced tenant arrears in the past year, the survey found, while 37 per cent of landlords said that demand had increased in Q4 from tenants - compared to just 7 per cent saying it had declined.

Tenant demand is reported as being particularly strong in Outer London, the East of England, and the South East, where more than two in five perceive it to be rising. Central London saw the largest positive increase in landlords reporting increased demand in the last quarter, with the number seeing an increase in tenant demand up nine percentage points on Q3. At the other end of the scale, in Wales the net increase of landlords reporting increased demand was down 11 percentage points to 29 per cent.

Around half (48 per cent) of landlords report seeing rents increase in the areas where they let over the last 12 months, with the average rental yield rising to 6.3 per cent in Q4. The North West saw the highest rental yield in Q4 at 7.1 per cent, while London saw the lowest at 5.4 per cent (Central) and 5.9 per cent (Outer).

The average buy to let portfolio is worth £1.1million, and generates a gross rental income of £50k.

Following an 18-month period of improvement, landlord’s confidence in the UK’s financial market fell significantly in Q4, with just 24 per cent rating its prospects for the next 3 months as good / very good compared to 37 per cent who were upbeat in Q3.

As such, landlords are becoming more acquisitive and the research found almost one in 5 landlords purchased a property in Q4, with three in 10 intending to do so in 2015.

Phil Rickards, Head of BM Solutions, comments: "Landlords continue to have faith in their portfolios and in tenant demand, with rental arrears and voids at historic lows. This is filtering through to their expansion plans, and we’re seeing a high proportion expecting to grow their portfolios in 2015.

"With inflation low and the economy growing, interest rate rises are not expected any time soon, but even when they do landlords claim to be well insulated, with the typical landlord saying it would only start to cause them serious problems if they rose to 7.3 per cent."