Landlords today are drawn from all sections of society, meaning it can be difficult to get reliable data on the sector. The sheer diversity of the profession is proof of how the market has opened up, but it does make it hard to gather statistics.
Fortunately, the Private Landlords Survey, published by the Ministry of Housing, Communities and Local Government, helps to fill the gap and lets us learn more about today’s modern landlords.
The survey shows that 94% of landlords operate privately, rather than as part of a company or organisation, and that the average income from renting a home is only £15,000 before any tax or other deductions.
Just under half of these landlords (45%) own just one property, but this proportion has decreased from 78% in 2010, showing that professional full-time landlords are becoming more of a force in the market. This is backed up by figures on the average length of time that people have been letting out property – 70% of landlords have let a property for at least six years, and the average length of time for all landlords was more than 11 years.
Half of all tenancies in the rental sector are let out by the small number of landlords – fewer than 20% – who have five or more properties with a further 31% of rental homes being let by landlords who own between two and four properties.
Interestingly, more than half of landlords intend to retain their properties over the next year and a further 11% plan to increase the size of their portfolio. That means almost two thirds of landlords are defying talk of a Brexit-related downturn in the market and retain a real confidence in the UK buy to let property market. In contrast, only 10% of landlords stated that they planned to reduce the number of properties they own.
For those who are looking to purchase more properties it appears that mortgages, rather than cash purchases, are the preferred method. The data shows that landlords who have been renting properties out for longer are likely to have used a mortgage to fund their initial purchase and are more likely to use another buy to let mortgage for future properties.
More recent landlords are more likely to use cash when purchasing new properties, with fewer than half of those who have been a landlord for under three years having a buy to let mortgage. When considering those who have been letting properties for between four and 10 years, this jumps to 58%.
Finally, the survey shows that most landlords (59%) are aged 55 or older, and a full third of all landlords are retirees. Digging further into these numbers, it is clear that many older landlords (44%) are motivated to invest in buy to let property to contribute further to their pensions, showing the value of property as a stable and lucrative long-term investment option.
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