Landlord confidence in the rental sector is still shaky, according to BM Solutions research.
The lender found that landlord confidence levels were largely flat quarter-on-quarter in areas including rental yields, capital gains and their own lettings businesses.
The biggest change was an 11 per cent fall in confidence around the short-term prospects for UK financial markets.
Landlords’ perceptions of tenant demand are also falling. Only three UK regions (Scotland, the East of England and outer London – showed an increase in demand from Q4 2017.
The remaining nine regions saw lower tenant demand compared to the end of 2017.
Rental yields in Q1 dipped slightly to 5.8 per cent, down from 5.9 per cent in Q4.
Landlords in the North West generated the highest rental yield of 6.7 per cent, closely followed by the West Midlands (6.6 per cent) and the East Midlands (6.2 per cent).
BM Solutions head Phil Rickards says: “After the new underwriting standards came in at the back end of last year, it’s encouraging to see landlords starting 2018 on a more optimistic note particularly around their own business and rental yields.
“While overall confidence in the UK’s financial markets is 11 per cent lower than a year ago and we’re still working through a period of landmark changes in the industry, there are clear signs of good health, as more than eight out of 10 landlords are telling us they are making a good profit from their business.”
The quarterly research, carried out with market researcher BDRC, is based on 1,043 interviews with landlords.