8:01 AM, 27th October 2022, About 2 years ago 12
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Despite the Government’s best efforts to dampen buy-to-let profitability, the average landlord has not only increased the size of their portfolio but has also boosted their rental income, research reveals.
The findings from Ocasa, the specialist rental platform, show that landlords enjoyed an 18% increase in their estimated total rental income.
Researchers looked at the data on current gross rental incomes, the average number of buy-to-let properties in a portfolio and the total rental income per portfolio, as well as how these factors have changed over the last year.
Across the UK, the average BTL investor has bolstered their property portfolio to an average of 8.2 properties in 2022 – that’s a 17% increase on the average portfolio size of 6.9 properties in 2021.
At the same time, the average gross rental income of the average property has also climbed by a marginal 0.5% to £7,891.
As a result, the average buy-to-let investment portfolio is now returning an annual level of rental income to the tune of £63,917 – an 18% increase on 2021.
Investors in Yorkshire and the Humber currently boast the largest portfolios with an average of 15.5 properties, followed by the North East (10.8) and East Midlands (10.5).
Buy-to-let investors in Yorkshire and the Humber have also seen one of the largest increases in portfolio size, up 50% year on year, second only to the South West where the average buy-to-let portfolio has increased by 69%.
Central London has seen the third largest boost to buy-to-let portfolio sizes with a 43% increase and while the average portfolio size there is amongst one of the lowest at just 8.3 properties, investors are not only seeing the largest levels of rental income, but they’ve also seen the largest increase in this level of rental income.
In fact, the average central London buy-to-let portfolio commands an estimated £93,890 in rental income per year, up 42% annually.
The South West has also seen a 42% increase in the estimated rental income of the average buy-to-let portfolio, along with the North West (37%).
Ocasa’s sales and marketing director, Jack Godby, said: “It’s great to see that, despite the UK Government’s best efforts, the buy-to-let sector has really hit the ground running in 2022.
“Like any area of the property sector, investment levels, property prices and rental values can vary drastically from one region to the next and this understandably has an impact on the size of a buy-to-let portfolio, the rent achieved per property and the overall return made.”
He added: “However, it’s clear that strength is building across the market with respect to an increased level of income.
“The fact that only two regions have seen the average portfolio size reduce is also testament to the resilience and consistency of bricks and mortar as an investment vehicle.”
Beaver
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Sign Up11:34 AM, 31st October 2022, About 2 years ago
Reply to the comment left by Old Mrs Landlord at 30/10/2022 - 09:06
I agree; I can't see why BTL would increase house prices; in fact I would have thought that corporate investors with better buying power would be more likely to negotiate a better deal than an owner occupier or possibly to buy at auction.
I think most authorities agree it's a supply and demand issue. And that's both supply of houses and supply of affordable mortgages to be able to buy them. There's a fairly comprehensive summary of the economics here:
https://www.economicshelp.org/blog/7243/housing/housing-supply-in-uk/
This includes the quote "Local authority housing stock has plummeted due to the popular right-to-buy scheme and transfer of housing stock to housing associations."
So I don't think that BTL has fuelled house price inflation. I think there's a question mark over the numbers in this market research because the numbers are not consistent with data availabel elsewhere but I do think that government policy has fuelled rent inflation.
Old Mrs Landlord
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Sign Up12:53 PM, 31st October 2022, About 2 years ago
Reply to the comment left by Beaver at 31/10/2022 - 11:34Yes, we all agree that policies which reduce social housing increase private renting and that restrictions to mortgage availability squeeze the numbers of first-time buyers, but I was interested to hear Mr. Cowper's explanation of the exact mechanism by which buy-to-let has increased overall property prices. To be honest, I had expected him to come back with a version of the supply and demand economic argument, viz. that BTL investors increase the number of potential buyers for a finite number of properties, an argument which to my mind does have some validity. I would, of course, have come back with the fact that private landlords and residential buyers rarely compete because they are looking for different features in the properties they buy. Investors also increase housing supply. They bring uninhabitable dwellings back into use, convert redundant commercial buildings to accommodation, enable new-build schemes by buying off-plan, convert houses too large for modern requirements into flats or HMOs and indeed some build small developments to rent.