There has been an outbreak of part time landlords entering the market in Britain.
People are renting out properties alongside their day jobs to enhance their main income, according to LV= landlord insurance.
LV=’s research revealed that over one in twenty, 7%, of British adults are letting properties to increase their earnings. They receive an average of £678 per month in rent, totalling almost £28 billion a year around the country.1
The highest rents are seen in London and the South East, at an average of £1,079 and £816 correspondingly. The West Midlands follows with £678, and East Anglia at £676.1
Around 60% is said to be spent on borrowing costs, management fees, and maintenance costs.1 This would leave landlords with an average pre-tax profit of 40%.
The boom is mostly being fuelled by people who move into a new house, and rent out their previous home. More than half, 55%, of the part time landlords never planned to rent out their property. The reasons for moving are for a bigger property (15%), moving for work (10%), or wanting a garden (8%). 6% of landlords rented out their home because they moved in with a partner and did not, or could not, sell their house.1
Managing Director of LV= landlord insurance, John O’Roarke, says: “Renting out a property can be a great way to cover your costs if you are unable to sell or want to hold on to a home and make some extra money from it, but it is not without risk.
“Landlords not only need cover for any damage to their property, but they also need to think about their tenants and how they will house them if the property becomes uninhabitable, as well as the lost rental income.
“If you are thinking of renting out a property, you should check the current regulations for letting properties in your area and make sure you have the right cover in place.,” he added.1