Landlord Confidence Index (LCI) No.20: 2023 Q4
Page 1
Page 1 - Additional commentary
Having risen rapidly in Quarter 3, landlord confidence consolidated in Quarter 4, making modest gains.
In Quarter 4 the Index rose to 42.9, up from 39.2 in Quarter 3.
Regionally, confidence growth was mixed. It grew strongly in the South East and both the East & West Midlands. In several other regions meanwhile, confidence retreated slightly. Across all regions however, confidence rose during 2023, as inflation and interest rates steadied – although the indicators suggest caution remains the key watchword.
The swings in confidence during 2023 are most notable in Wales. Legislation changes, and the prospect of rent controls drove down landlord confidence during the first half of 2023. The easing of these fears, helped to steady the nerves of Welsh landlords.
Landlords in Wales, as with every region in England - bar the South West – had a confidence score in Quarter 4 which exceeded their average confidence levels for the year.
Page 2
Page 2 - Additional commentary
Although confidence levels are increasing, they remain some way off long term highs. The reasons for changing either portfolio size or rent levels remain negative, meaning landlords are reluctant to expand, and are also nervous about rent levels.
There is evidence here that the demand side may be cooling off somewhat. Landlords who have been looking for tenants are less likely to report high levels of tenant demand, whilst a smaller proportion reported they had been able to relet vacant property in under four weeks – this figure now stands at 75% compared to 80% in Quarter 3.
Looking back over the last twelve months, and the proportion of landlords buying and selling point continue to raise concerns about the supply of rental homes in England & Wales.
However, there is some good news here – the proportion of landlords now planning to sell over the next twelve months has fallen considerably. There remains little sign however that current landlords are being tempted to buy property and expand their portfolios: concerns about the Renters Reform Bill and interest rates are still uppermost in landlords’ minds.
