Britain is seeing a boom in ‘part-time’ landlords where people are letting properties on the side to boost their main income, according to new research from LV= landlord insurance.
It found that more than one in twenty (7%) British adults rents out a property to supplement their income and receives an average monthly rent of £678, equating to nearly £28 billion a year across the country.
Landlords in London and the South East collect the highest rents at £1,079 and £816 respectively, followed by the West Midlands (£678) and East Anglia (£676). Approximately 60% of this is spent on borrowing costs, management fees and maintenance costs, leaving landlords a healthy pre-tax profit of 40% on average.
The trend is mainly being driven by people moving to a new home and then renting out their old one. In fact, over half (55%) of these landlords are renting out properties that they never intended to, often because they wanted a bigger property (15%), they had to move for work (10%) or they wanted a garden (8%). One in twenty (6%) landlords say they ended up renting out a property because they moved in with a partner and did not want to sell or couldn’t sell their own.
John O’Roarke, managing director of LV= landlord insurance, said: “Renting out a property can be a great way to cover your costs if you are unable to sell or want to hold on to a home and make some extra money from it, but it is not without risk. Landlords not only need cover for any damage to their property but they also need to think about their tenants and how they will house them if the property becomes uninhabitable, as well as the lost rental income. If you are thinking of renting out a property you should check the current regulations for letting properties in your area and make sure you have the right cover in place.”
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