Professional Landlords: Evolving and Prospering
As a landlord you know just how much the private rented sector has changed in recent years and how important it is to carefully manage your portfolios, especially in terms of maximising yields and minimising costs.
With this in mind, it’s little wonder that the number of landlords in the private rented sector has fallen but those who have made the necessary portfolio adjustments are the ones who remain profitable.
Research from Hamptons International estimates that there were 222,570 fewer landlords in the private rental sector in 2019 than in 2017. The number of landlords is said to have peaked at 2.88 million in 2017, but tax and regulatory changes have caused some landlords to sell up and leave the sector.
However, despite this decline, the average landlord now owns more properties. The average landlord in Great Britain owned 1.93 buy-to-let properties last year, the highest level since 2009 when the average landlord owned 2.02 properties. Last year, 30% of landlords owned more than one buy-to-let property, the highest proportion on record. This is up from 21% in 2016 when many of the tax and regulatory changes were announced and is double the proportion recorded a decade ago when 15% of landlords owned multiple buy-to-lets.
The average landlord based in the North East owned 2.05 properties last year, closely followed by landlords based in Yorkshire & Humber (2.03 properties per landlord) and London (2.01 properties per landlord). Investors in Wales and Scotland were least likely to have big buy-to-let portfolios, with the average landlord letting out 1.83 properties in each region. Average rents for new lets rose to £998 pcm in January, up 3.6% on the same time last year. Rents rose in every region but increased most in the South West (6.0%), followed by the East (4.1%) and Greater London (4.1%). Wales recorded the weakest rental growth at 1.2%.
The figures reinforce the rise of professional landlords who continue to reap the benefits from strong rental demand, increasing tenant competition, highly competitive mortgage rates and robust rental yields.