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Sunak’s EPC U-turn slows landlord exodus as gloom lifts

Landlord confidence has improved over the course of the past quarter according to a respected quarterly sentiment survey.

The Q3 2023 BVA BDRC Landlord Panel research report for Foundation Home Loans is the first since the government chose to delay scrapping Section 21 until court reforms have kicked in, and to row back from stricter mandatory EPC levels. 

Some 12 per cent of landlord respondents said the EPC U-turn meant they would be able to stay in the rental market and after five consecutive increases in figures showing landlords ready to quit the sector, this most recent quarter reveals the figure actually falling - from 37 per cent in Q2 to 28 per cent in Q3.


While eight per cent of all landlords planned to increase the size of their portfolio over the next year, larger portfolio landlords were more likely to purchase - some 18 per cent of landlords with 20 or more properties said they would add to their portfolios in the coming year.

Some 71 per cent of landlords reported an increase in tenant demand, up by four per cent since the last quarter and reaching an all-time high. Only three per cent of landlords reported a decrease in tenant demand.

The increase in tenant demand, coupled with ongoing private rental stock shortage, meant the proportion of landlords who had seen rising rents in the last year was up five per cent on the last quarter’s results. Rental yield also risen slightly quarter-on-quarter, to 5.3 per cent.

Grant Hendry, director of sales at Foundation Home Loans, says: “There are clearly a large number of factors for each individual landlord to take into account when looking at the performance of their own portfolio, and their optimism – or otherwise – for the future. However, it’s clearly good news to see a significant shift in positivity from landlords across a number of aspects, and to see confidence having risen quarter-on-quarter.

“Certainly, overall strong tenant demand is playing a major part here, as perhaps is the belief that mortgage rates may now have topped out, and that the market is finally shifting southwards, with more competitive rates meaning stronger affordability.

“The Government’s announcement on minimum EPC levels not moving up to C and above was perhaps a relief to many, particularly in the short-term, and for a number it may make the difference in terms of them staying invested in the sector.

“The number of landlords saying they plan to divest over the next 12 months has fallen, and this may partly be due to the retraction of the energy efficiency regulations for the PRS, but this should not detract from the need for rental properties to be as energy-efficient as possible, particularly in light of the increased utility bills all households have suffered in recent years.

“While it is too early to say whether we are seeing the start of a new trend line, there appear to be many more landlords feeling optimistic about their future within the PRS, and if this means landlords can keep much-needed housing supply available to tenants, then this can only be viewed as a positive.”

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  • icon

    But the prospect of a Labour government will speed it up again. Remember there are lies, damn lies and statistics.


    and then there are politicians... and then there is Boris Johnson....

  • Fed Up Landlord

    And only yesterday a new
    ' How To Rent Guide" issued stating you cannot refuse to rent to benefit tenants or those with pets. The centre left of the Con- servative Party flexing it's muscles. Angola Payner banging on about Section 21...again for Liebour.

    Get. Out. Now.

  • icon

    We have a year 😰 then the clock 🕰 starts to tick again.

  • Nic  Kaz

    It’s not a great time to sell, so those landlords who can’t afford to upgrade are no doubt using this breathing space to stay in the market. But the problem of upgrades and cost hasn’t gone away so once the EPC C target is back on the books those properties will be offloaded. I guess the headline is right, in that the sell off may have slowed, but we are still on the slippery slope.


    Sales traditionally slow in the run up to Christmas. Come the New Year they will rise again.

  • icon

    Usually the market slows this time of year, lol. But, some pressure has been taken off, but it is very small.
    However, I'm not convinced that the EPC argument is the biggest issue currently. The RRB is not going anywhere and once empowered tenants start flexing there new found rights re-enforced with rent rebates, let see whm will then want to invest in this market place!


    Exactly. Currently good tenants will be free to turn bad. Some won't as they know once out they will not find another PRS property. Others are stupid (I'm thinking S R-B), and will want to kick up a fuss, make landlords' lives difficult and 'earn' compensation. Then get into a nice council house where they get A1 service.

  • icon

    It would take a lot more than a U turn on EPC to make me stay in the game!

  • icon

    Totally agree Shane!!! As much as I hate the Conservatives I might have stuck it out if they were just beginning a new term as possibly the penny would have dropped about mass homelessness....but with Labour on the way...not a chance in hell! Just heard from my charming Nottingham tenants who have just decided they might be ready to leave after refusing to go THE DAY before the agreed date afer Section 21. I might be in time to start court proceedings or might have to start all over again!! My house, been in my family over 100 years butyesIll just wait till it suits you to leave!!! If my sale falls through it will stay empty till it's sold, no matter how much it costs me!

  • icon

    I feel your pain Rebecca. In Scotland it's a nightmare.. I've been knocked back 3 times when trying to evict tenants so that I can sell the house they're on. The law here fully l looks after the tenants and don't give a hoot about landlords, no matter how good they are... Based on my experience so far, I'm getting rid of the lot before it's too late.


    Just like here in Wales, Shane, the communists in Cardiff have made letting out property very risky.
    As Nic states though, now is not a good time to sell and CGT allowances are shrinking rapidly.
    No doubt that a new Labour Government in Westminster will also make life difficult for us, by possibly removing any allowance and actually raising the rates that we have to pay.


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