Typical trends of buy-to-let investors revealed

The majority of UK buy-to-let landlords still consider renting out their property as a part-time activity, with many favouring small portfolios and self-management.

However, a new report from the Council of Mortgage Lenders reveals that a number of bigger investors have begun to enter the market. Despite the fact that rents only make up half of an income of a typical investor, there has been an increase in landlords looking at larger portfolios.

Trends

Data from the report shows by 87% of landlords questioned manage their portfolio as either an individual or couple. 14% said they classed themselves as a company or group, up from 11% in 2010.

95% noted that they do not consider letting out a rental property as their main business or occupation. This said, there is a clearer trend towards larger portfolios. During the last six years, those landlords managing a single property fell from 78% to 63%. In the same period, those investors managing between two-four properties increased by 17% to 30%.

The number of landlords claiming that they were left out of pocket due to their tenants defaulting or void periods fell sharply, from 21% in 2010 to 5%. This further underlines the imbalance between supply and demand in Britain, but also shows the need for unoccupied property insurance!

Typical trends of buy-to-let investors revealed

Typical trends of buy-to-let investors revealed

Income

In addition, 90% of landlords said that rental yields made up less than half of their total income. Those landlords defining their rental income as at least one quarter of their overall income increased by 7% in the last six years. In the same timeframe, 10% more landlords said their rental income covered between one quarter and one half of their total earnings.

Concluding, the Council of Mortgage Lenders report said, ‘while it looks like the typical landlord is still an individual running a rental business on the side, there appears to have been a gradual expansion of these side businesses-which, given the rise in demand for rented accommodation, should come as no surprise.’[1]

 

[1] https://www.buyassociation.co.uk/2016/08/18/meet-britains-average-buy-to-let-landlord/

 

 

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