Landlord Confidence Index (LCI) No.13: 2022 Q1
Page 1
Page 1 - additional commentary
Following a run of growing confidence, the LCI dipped slightly in 2022 Quarter 1. Given the scale runs from -100 to +100, we can still assign a “broadly neutral” rating. There are more landlords either “less confident” or “much less confident” (30.9%) this quarter than last quarter (26.6%). Historically, the index is still high.
Only Inner London (+6.3) recorded a positive confidence score this quarter. It is the highest confidence score any single region has posted in the Confidence Index.
Wales (-20.3) has posted the lowest confidence score for the third consecutive quarter. Its confidence score is the lowest it has recorded since 2020 Quarter 4. Though not shown, Wales also has the lowest confidence score on a twelve-month weighted average basis.
Page 2
Page 2 - additional commentary
Regulation change – which includes the fear of future change – and rising costs are key drivers when landlords take decisions about rent and the size of their portfolio.
Whilst landlords continue to report high levels of demand for their property, the rate of demand increase – seen throughout 2021 – has now levelled off.
The fall in confidence runs alongside increases in the proportion of landlords planning to sell and a decrease in the proportion of landlords planning to buy.
The impact of the cost of living is also reflected in the data reported in the sidebar of page 2. Whilst 60% of landlords stated they had frozen rents over the last twelve months, this is the lowest proportion of landlords doing so since the LCI data collection began in 2019 (Q1).
Closer analysis of the LCI underlines regulation and cost changes being bigger factors among those landlords planning to sell property and/or raise rents. Rent increases are being driven by these factors and is not a function of tenant demand.
