With savers receiving dismal returns from banks and building societies, thousands more people are turning to buy-to-let as a means of supplementing their income, fresh income data from HMRC shows.
The figures reveal that the number of private landlords in this country has increased by more than 100,000 a year since 2011-12, with 1.9 million people having earned money from property in 2015-16 as income from property hit £16.2bn, up £4.1bn over four years.
The annual personal incomes statistics, published by HMRC, also reveals that total income from dividends almost doubled over the same period from £42.5bn to £83.8bn as average incomes soared to £17,000 per investor.
Reflecting on the data, Sean McCann, chartered financial planner at NFU Mutual, commented: “The chancellor will be rubbing his hands in anticipation as these huge incomes from dividends and properties give the taxman two bites at the cherry.
“It’s not just the income that will be taxed. The latest predictions from the Office for Budget Responsibility show capital gains tax receipts will rocket from £8.8bn this tax year to £9.9bn in 2018-19 and £13.3bn in five years’ time. So they clearly expect many investors to sell up and realise their gains between now and 2022-23.”
But McCann added that he believes that the number of landlords is likely to “plateau or even fall” over the next few years, as property investors “start to feel the pinch from a series of tax measures that have already come into force”.