Landlords less confident of profit stability

Landlords are losing confidence in their ability to rely on steady rental profit, despite the fact that actual rental yields have remained fairly stable.Recent figures from the National Landlords Association show the proportion of landlords who are optimistic about their ability to rely on a steady rental yield has fallen 15 per cent in the past two years.The figure is down from 64 per cent in the second quarter of 2015 to just under half within the same period in 2017.Over the past few years, the average yield has fluctuated around the six per cent mark.Yorkshire and Humberside has one of the lowest rental yields across the country currently at 5.6 per cent. Only London is lower, with outer London generating five per cent rental yields and central London on 5.3 per cent.Landlords in the East Midlands currently generate the highest rental yields at 6.9 per cent.The news comes during a time when property prices in many areas of the United Kingdom are stalling.Richard Lambert, Chief Executive Officer at the NLA, said:“Average rental yields have remained fairly stable over the past few years, yet there is a steady increase in landlords losing confidence in their ability to make a profit from letting property.“This perception probably exists because many will now be feeling the impact on their businesses of greater taxation and the costs of complying with regulation, which are eating away at their profits and making it harder to provide homes.“Like any business, the increasing value of the capital assets on your balance sheet will be of little help if you are treading the fine line between profit and loss, especially if you can’t keep up your mortgage payments in the short term”.