Limited company landlords remain firmly bullish on the rental market with new data showing confidence holding strong despite mounting cost and regulatory pressures.
Research from Kensington Mortgages found that 84% of landlords expect rental yields to increase over the next 12 months, while 89% are confident about the wider outlook for the UK rental sector.
The figures point to a market underpinned by demand, with 80% of respondents expecting tenant demand to rise and 77% anticipating further house price growth.
However, that optimism sits alongside clear headwinds. More than three quarters (77%) expect mortgage costs to increase, while 81% report rising running costs across repairs, insurance and maintenance. A further 79% believe the regulatory environment will become more challenging as reforms take hold.
INTEREST RATES
Interest rates remain the single biggest driver of landlord sentiment, cited by 31% of respondents, followed by regulation (26%) and property prices and rental demand (both 25%).
Despite the pressures, most landlords are holding their nerve. Over half (53%) plan to maintain their portfolio size over the next year, while 38% intend to expand. Fewer than 1% are planning to exit the sector entirely.
Access to finance also remains supportive, with 74% of landlords saying they currently find it easy to secure buy-to-let lending.
The data highlights a continued shift towards professionalisation, with 53% of landlords holding their entire portfolio within a limited company structure. Returns are also marginally stronger, with average gross yields of 5.04% for company-held assets compared with 4.88% for personally held properties.
Portfolio strategies are also evolving. Family homes remain the most common asset type (40%), followed by larger HMOs with six bedrooms or more (35%). Looking ahead, 95% of landlords plan to diversify, with corporate lets the most popular target (37%).
RESLIENT MARKET
Allison Buckley (main picture, inset), Chief Executive Officer of Kensington Mortgages, says: “The latest findings from our BTL Barometer underline the resilience and professionalism of today’s limited company landlords.
“Despite experiencing higher operating expenses and anticipating increased mortgage costs and greater regulatory complexity ahead, landlords remain firmly committed to the sector – underpinned by strong tenant demand and expectations of improving yields.”
INCOME AND ADAPTABILITY
And she adds: “What’s particularly notable is that confidence is not translating into complacency. Many landlords are actively reviewing and diversifying their portfolios, with growing interest in corporate lets and larger HMOs, demonstrating a clear focus on long-term income and adaptability.
“The limited company structure continues to play a central role in this evolution, with yields marginally higher on company-held portfolios compared to personal holdings. As the market continues to evolve, specialist lenders have an important role to play in providing the flexible, tailored financing solutions that professional landlords need to navigate change and seize opportunity.”
