Landlord confidence in renting out property as a business has plunged to a new low.

The market has taken a buffeting from tax and law changes that are impacting the bottom line for landlords.

Rental profits are falling as tax changes take a bite, while the tenant fee ban is also taking a chunk out of income as letting agents try to restrict the damage to their businesses by switching fees to property owners.

It’s no surprise that the latest barometer of landlord confidence reports expectations have hit a seven year low and more landlords are thinking of selling investment property than at any time in almost a decade.

• The survey of more than 700 landlords by BVA BDRC Landlords Panel has revealed some shocking data for the second quarter of 2019:
• 71% of landlords lack a positive expectation for the year ahead in buy to let, compared to 54% 12 months ago.
• 39% are disappointed rental yields have fallen to 5.5% – the lowest level in almost 10 years
• 26% are ready to sell at least one rental property over the next 12 months

Buy to let is not all doom and gloom.

Although profits are falling, the drop is not as bad as many thought.

Eight out of 10 landlords reported making a profit. For a third, renting property is their only full-time job and sole source of income. Only 4% confirmed their property business had made a loss, down from 5% in the previous quarter.

The survey looks at five measures of confidence – and each declined in the second quarter.

Hopes over making capital gains from increased property values was down 23%, from 32% a year earlier.

More than a third (39%) had little hope rental yields would increase. Down from 49% in Q2 2018.

Financial hopes crashed, too, with 15% optimistic about buy to let and the general economy, a fall from 21% last year, while only 11% had high hopes for the financial markets, compared with 15% a year ago.