Some might say ‘delusional’
Others would prefer ‘visionary’
I’ll leave you to decide
But as incongruous as it may sound, according to the NLA’s Landlord Optimism Index, private residential landlords are more hopeful about their prospects now than at any point since the start of the credit crunch.
As always, context is crucial and it should be noted that confidence remains 14 points below the 2007 high point. However, net landlord optimism is up an impressive 20 points from its lowest point two years ago.
So, what have landlords got to be so positive about?
It would be misleading for the NLA to make out that the future is entirely rosy for landlords, there are significant cuts on the way in respect of housing benefit budgets. LHA rates for much of the country are to be cut, and caps imposed on the most expensive areas.
A great number of local authorities are also working on ways to limit the growth of the shared housing market – as described in earlier blog posts.
Maybe there are also reasons for this emerging optimism:
– Bank of England interest rates have been at the historically low rate of 0.5 percent since March 2009.
– Property prices remain suppressed, facilitating affordable deals
– Tenant demand remains high – and continues to outstrip supply in much of the country
– Slowly but surely buy-to-let lenders are coming back to the market with improved deals
So does this mean 2011 is destined to be a great year for the PRS or are the next 12 months going to be defined by cuts, arrears and hardship for landlords in the UK?
Neither may true – or both for that matter.
The one thing that we can say for certain is that there remains no-such thing as a ‘typical landlord’.
But given the lack of a typical tenant, maybe that’s no bad thing.