Are You A Typical Landlord?

Posted by Matt on 4th March 2017

I read a great article a few months back which gave some fascinating insights into a typical landlords' profile. The research, by Kath Scanlon and Christine Whitehead of the London School of Economics was carried out on 2500 landlords, and had some very interesting findings, a few of which I'd like to share with you in this blog.

The Typical landlord

  • The typical landlord owns rental property close to their own home
  • Their original motivation to become a landlord was as a contribution to their pension provision, as an investment for capital growth and income, in preference to other investments, or to supplement earnings
  • Two thirds of landlords gain less than 25% of their household income from rent. Around 1 in 20 said they made a profitable full-time living from being a landlord
  • Median annual gross rental income was £7,500, but the mean was £17,300 
  • Nearly a quarter of landlords ended up renting out property incidentally due to circumstances, while around 14% entered the market originally to provide a home for a relative or friend

How old are landlords?

  • Back in 2004, only 24% of landlords were aged 55 or over, compared with 61% today
  • Buy-to-let landlords are typically younger than other landlords
  • In 2004, 18% of buy-to-let landlords had bought their first property within the last two years, compared to around 7% today

How many properties do landlords own?

  • Some 62% of landlords own only a single rented property
  • Buy-to-let landlords are more likely to have a multi-property portfolio than other landlords
  • Just over half of buy-to-let landlords own more than one property, with the mean size of a buy-to-let portfolio being 2.7 properties

How many landlords have mortgages?

  • According to the survey of 2,500 landlords, some 49% of respondents owned all their property outright, with no mortgage debt at all
  • 47% of the rented properties in the survey were backed by a buy-to-let mortgage
  • Among buy-to-let landlords, over half had loan-to-value ratios on their total portfolio of below 60%, with only 1% reporting loan-to-value ratios of over 90%

Landlords' plans for the future

  • Landlords appear to take a long-term view of their property holdings, and many landlords who entered the market decades ago remain active 
  • More landlords expect to reduce their property portfolios than to increase them
  • Over the next 12 months a net 6% of landlords expect to reduce their portfolios, while over the next five years a net 14% expect to do so
  • Only 21% of landlords overall cited any element of tax changes as part of their reason to sell
  • Overall awareness of the various tax changes was extremely variable
  • The great majority of landlords expect their net income to stay the same or increase slightly over the next five years

You can find the full article written by Warren Lewis on the Property Reporter website here.

By Matt

Redbrick Properties was established back in 2002 and since then has gone from strength to strength building up a fine portfolio of residential properties along the way.

We could never be accused of being a faceless agency as both Mark and I still work front-line in the office along side our experienced and capable staff.