Sector has reasons to be ‘optimistic’ amid fewer credit downgrades, S&P says

But he added: “There are a number of reasons to be a bit more optimistic. We still have more ratings with a negative outlook than with a positive outlook. But this year, we lowered ratings on only two entities, compared with nine entities over the previous two years.”

Mr Ejgel pointed to the fact that many landlords are focusing on investment in existing stock and dialling down development.

But he said that with a focus on cost control and a “positive difference” between rent increase and inflation over the next couple of years, there is likely to be a “gradual improvement in the performance of the sector”.

But he warned landlords to still be cautious with investments. 

“If there are either new models and new ideas to get investors [involved] in the sector, that’s positive. Any support from government is positive as well,” Mr Ejgel said. “But it’s important to keep an eye on the risk associated with certain projects.”

In July, S&P warned that ramping up spending on new and existing homes will put half of the ratings in its portfolio “under pressure”.

However, in March Mr Ejgel said the agency expects fewer credit rating downgrades in the sector.