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Landlord Confidence Soared in 2023 Despite Rising Interest Rates

21 Feb 2024

There’s no doubting 2023 was a challenging year for landlord borrowers and that a much higher interest rate environment presented the bulk of those challenges, particularly for those who were coming off deals and rates from two/three/five years’ back when we had historically low rates.

Rising Rates (1)

You might anticipate landlords would be in something of a negative and mood by the end of last year, however the latest BVA BDRC research, commissioned by Foundation, paints a somewhat different picture on the whole – one which has a far greater degree of positivity than we might have been led to expect.


The research – comprised of 389 online interviews with landlords which took place throughout December – shows increased confidence across all of the metrics on a year-by-year basis, and three metrics on a quarter-by-quarter basis.

Those metrics are comprised of confidence about: capital gains being achievable on properties, the PRS as a whole, the UK financial market, plus rental yield and tenant demand.

The first three have positive scores for the last quarter of 2023, rental yield has stayed the same, and landlords are only a little less confident about tenant demand because far more are ‘unsure’ about how this might play out.

High Tenant Demand

That is entirely understandable – let’s be honest here, tenant demand has been nigh-on stratospheric throughout the last 12 months, and there was always going to be a point where this would dip slightly, especially given how high it has been, compared to the supply of properties available.

Despite there being a large amount of talk about an exodus of landlords from the PRS and property moving into owner-occupation, reported divestment of property by landlords has actually fallen, down by 4% on the previous quarter.

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Average rental yield increased by 0.3% on the previous quarter, with larger portfolio landlords achieving higher yields on average, compared to those with smaller numbers of properties.


Overall, after a period where higher interest rates did present some considerable challenges for landlords – and are likely to continue to do so – we can view some light at the end of the tunnel, as evidence by January price cuts, and an environment which should help more landlords meet affordability criteria.

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That is clearly good news for advisers, as is a distinct increase in purchase interest. 2024 has kicked off strongly in the buy-to-let space, and with our new ‘Solutions by Foundation’ products, we can cover a new layer of specialist buy-to-let needs, covering multi-occupancy products, mixed-use part commercial property, expat borrowers, as well as our options for individual and portfolio landlords, plus those buying or remortgaging via limited companies. It’s all on the table to support the landlord borrower community.

Find out more about Solutions by Foundation here.

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