A Ministry of Housing survey has revealed that landlords only earn around £15k a year. This is a far cry from the public perception of landlords. Many people assume landlords earn a fortune from letting properties out to tenants, but this data shows most landlords can’t only afford to run their property businesses part-time. Indeed, only 4% of landlords say rental properties are their sole source of income.
The Private Landlords Survey has revealed a lot of interesting facts. It says the majority of landlords run their property lets as individuals; only 6% of landlords are incorporated. Nearly half of landlords only own one property, but 50% of tenancies are run by landlords who own more than five properties.
Size of Portfolio
31% of landlords own 2-4 properties. More interestingly, the number of smaller landlords with a single property has dropped from 78% to just 45% in eight years whereas the number of career landlords with more than five properties has risen from 5% to 17%. This could be because mortgage interest rates have been very low in this period, while demand for rental properties has increased, making the sector more profitable for professional landlords.
The survey revealed that landlords keep their property businesses running for an average of 11.5 years and 70% of landlords have been in the game for at least six years. Most are older. 59% of them are aged 55 and above.
There has been a number of stories lately suggesting landlords are leaving the sector in their droves, but the data from this survey suggests otherwise. 53% of landlords have no plans to change their property portfolio but 11% want to buy more properties. By comparison, 10% say they plan to sell one or more properties.
Landlord Letting Habits
The survey spoke to letting agents as well as landlords and some interesting differences came to light. For example, landlords are far pickier about who they let their properties to and are more likely to exclude certain groups of tenants, such as those claiming benefits. Only 6% of letting agents refuse to let properties to families whereas 18% of landlords turn families away. 25% of landlords won’t let properties to tenants with a non-UK passport whereas only 10% of letting agents follow the same practice.
Longer Tenancies Preferred
In addition, tenant charities will be delighted to learn that 75% of landlords would be happy to offer longer tenancies. Even more were keen if there were additional safeguards in place to make it easier to evict problem tenants.
Does this data match up to your own experiences in the private rental sector? Tell us more in the comments below.
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