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Landlord optimism highest in the East Midlands

Landlords operating in the East Midlands are the most optimistic about the future prospects for their rental business according to the latest quarterly research from BVA BDRC examining the attitudes and experience of over 850 landlords in England and Wales. 

Half of landlords in the East Midlands said they felt good or very good regarding expectations for rental yields over the next three months, with one in three (31%) reporting optimism about the prospect for capital gains.

This contrasts with landlords in Wales, where fewer than one in three (29%) felt good about the outlook for rental yields and fewer than one in seven (14%) saw the potential for capital gains. Landlords in the North East were least likely (8%) to rate the outlook for capital gains positively. 


Figure 1: Landlords reporting business expectations for the next 3 months as good or very good 

Top 3 regions Rental yields
East Midlands 50%
Yorkshire & Humber 46%
South West 45%
Bottom 3 regions Rental yields
Wales 29%
North East 32%
London - Central 34%
Top 3 regions Capital gains
East Midlands 31%
London - Central 28%
East of England 25%
Bottom 3 regions Capital gains
North East 8%
Wales 14%
Yorkshire & Humber 16%

Source: BVA BDRC, Landlords Panel Syndicated Research, Q3 2019 

Landlords in the East Midlands, together with those in Yorkshire and Humber, also achieved the highest reported rental yield at 6.1%, compared with an average for landlords operating across all regions of 5.6%.


Figure 2: Overall rental yield by location - %

Location  Average (mean) yield - %
East Midlands  6.1 
Yorkshire & Humber  6.1 
North West  5.9 
West Midlands  5.6 
Wales  5.6 
South West  5.5 
South East (exc London)  5.5 
London – outer  5.4 
North East  5.3 
East of England  5.2 
London – central  5.1 
All regions  5.6 

Source: BVA BDRC, Landlords Panel Syndicated Research, Q3 2019 

However, only landlords in the East of England, Yorkshire and Humber and London added to their property portfolios in the last three months. In all other areas, sellers either outweighed or were equal to buyers. 


John Heron, Managing Director of Mortgages at Paragon said:

Despite the positive picture in some regions, it’s clear landlords are feeling bruised. All the available data shows that tax changes have driven landlords to pull back from the market and encouraged a sharper focus on yields. This has reduced the stock available to rent and we are now seeing inflationary pressures building in many regions. The upshot is that tenants are having a harder time finding a good quality home in the sector and having to pay more for it.

29 October 2019

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551