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Central London Landlords Least Optimistic About Rental Demand

Landlords in the East of England are most hopeful

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Landlord confidence across the U.K. has improved in the first quarter, but Central London landlords are the least upbeat about rental demand and yields, according to Paragon.

Nicholas Free/Getty Images
Landlord confidence across the U.K. has improved in the first quarter, but Central London landlords are the least upbeat about rental demand and yields, according to Paragon.
Nicholas Free/Getty Images

While landlords across the U.K. are feeling more positive about the prospects of increasing demand and rental yields compared to the last quarter of 2017, those in Central London are the least confident, according to a study released Wednesday.

Only a quarter (26%) of landlords in Central London surveyed by U.K. research consultancy BRCD on behalf of Paragon, a consumer finance company, rated prospects for their own rental business as "good" or "very good" over the next three months.

In addition, 57% of landlords in Central London said tenant demand was stable or increasing, less than other regions, including the East of England, as well as the East and West Midlands.

More:Property Registrations Down Across England and Wales

"After an unprecedented level of change, it’s encouraging to see landlord confidence stabilizing this quarter," said John Heron, managing director of mortgages at Paragon, in the report.

"At a regional level, the East of England and the Midlands look well supported, with encouraging data on tenant demand, yield and capital gains while the London market adjusts its footing after many years of strong growth," he said.

Overall, landlord confidence improved in the first three months of 2018 compared to the prior quarter, shaking off some of the negative impacts of new tax measures for landlords enacted in 2015 and tighter mortgage underwriting rules last year, the report said.

Landlords in the East of England were most upbeat about the future, with 53% of those surveyed rating letting prospects as "good," and 81% noting that rental demand was either stable or increasing.

The survey was conducted online with 1,043 members of the National Landlords Association from March 9-20.