Has there ever been a better time to be a landlord?

Has there ever been a better time to be a landlord?

In recent history it would seem not.

According to the latest findings from the Landlords Panel (BDRC’s quarterly barometer of landlord sentiment and the health of the PRS), landlords’ confidence is back to pre-credit crunch levels, with two thirds rating the prospects for their own lettings business in the next 3 months as good or very good.

On the evidence, this confidence is well founded. The incidence of both rental arrears and void periods, two of the most expensive problems landlords encounter, are at a post-credit crunch low. In Q4 2014, about a third (32%) of landlords reported tenant arrears, down from a high of 56% in Q4 2010.  With no signs of tenant demand easing, just 30% of landlords reported that they’d had a property empty recently.  Indeed, a mere 7% of landlords reported that they had seen demand for rental properties fall away to any extent in the last quarter of 2014.

And what of the financials?  Well, more than 8 in 10 landlords report that they are making a profit from their lettings activity, with a quarter of these able to make it their full time living. And it’s not difficult to see why when you look at the figures. The average portfolio boasts 7.9 properties, is worth a sizable £1.1million pounds and generates £50,000 in rental income per annum. Engaging our maths brains for just a minute, this essentially equates to each rental property generating a tidy rental income of £6,300 per year and providing landlords with an average yield of 6.3%.  And there could be better news to come, as half of landlords report seeing a trend for increasing rents in the areas where they operate.

So what does this mean for landlords, their portfolios and the size of the PRS? It means they’ve turned into an acquisitive bunch, with 29% of landlords intending to purchase an additional property in the next 12 months. Although expansion activity is more likely amongst more established portfolios (36% for landlords with 20+ properties), even 20% of those with just one property are looking to grow their portfolio in the coming year.  With the rental market as it is, who can blame them?

So, has there ever been a better time to be a landlord? It seems certain that these key indicators of PRS health along with historically low BTL mortgage rates all point to it being a landlords market, and trust me, as a tenant in an extortionately priced, one bed flat under a flight path, it definitely feels like it!

Source: BDRC Continental’s Landlords Panel Q4 2014

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Latest Comments

Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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