Confidence among landlords has dipped for the first time in almost two years, driven by uncertainties including housing benefits and tax changes announced in the emergency budget, according to the latest NLA Landlords’ Optimism Index.
The NLA Index dropped from 51 to 47 points between Q1 and Q2 2010.
54 per cent of landlords (57 per cent in Q1 2010) rate their prospects for the next three months as good or very good. However, four in ten landlords expect the increase in Capital Gains Tax to have a detrimental impact on their investment, while others predict the increase, and any future interest rate rises, will prompt a decline in investment.
Landlords also expressed concern about planned cuts to the Local Housing Allowance which could lead to more rent arrears.
Chris Norris, Policy Manager, NLA, commenting on the Index, said: “Despite gains over the past two years, landlord optimism has dropped from the first quarter of 2010 as landlords consider tax changes announced in the emergency budget and they hear talk of a double-dip recession. Furthermore, cuts to Local Housing Allowance is causing concern to many landlords as it could leave their tenants struggling to pay their rent.”
“Despite these negative factors, the NLA / BDRC Continental survey shows that more than half of landlords are still positive about the next three months, predicting strong rental demand as people hold off deciding whether to continue renting or buy whilst current economic uncertainty continues.”