Landlord confidence in the state of the buy to let market is rising – but the underlying indicators are wildly different between regions.

A study for buy to let mortgage lender BM Solutions shows the feel-good factor for landlords across the country has reached an 18-month high – and increased by 8%.

However yields – the rate of return on investment – vary between the highest in Wales at 6.9% and the lowest in the North East at 5.7%.

The average rental yield of 6.2% is the highest reported since the last three months of 2014.

Tenant demand also differ wildly.

Landlords in Scotland feel demand has dropped by 15%, while those in the East and West Midlands report 42% and 33% increases in the past three months, respectively.

London buy to let owners also feel tenant demand is low.

Property investors most likely to increase their portfolios have homes to let in the East Midlands and North East, while those in Central London and the South-East say they are unlikely to buy more properties.

Phil Rickards, head of BM Solutions, said: “It is encouraging to see that confidence across all of the key indicators has either increased or stayed the same on a 12 monthly basis and is particularly strong when landlords are considering their own lettings business.

“It’s a promising sign for landlords that rental yields are on the increase and are recovering some of the ground they have lost in recent years.”


Landlord confidence ratings Q2 2018


Confidence in near-term prospects for:

Q2 2017 Q1 2018 Q2 2018 Quarterly Change Annual Change
UK’s financial markets 12% 15% 15% 0% 3%
Capital gains 29% 30% 32% 2% 3%
Rental yields 49% 52% 49% -3% 0%
Own letting business 36% 41% 44% 3% 8%
Private rental sector 19% 21% 21% 0% 2%

Source: BM Solutions