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TODAY'S OTHER NEWS

Rental income for BTL landlords jumps 15% year-on-year to £18.7bn

Rental income for buy-to-let landlords has increased by a staggering 15% over the past 12 month to hit £18.7bn, up from £16.2bn in 2015-16, as rents continue to rise in response to all of the extra costs landlords have experienced over the last few years, new figures show.

With demand from tenants rising, at a time when the supply of much needed new private rental stock is dwindling, rents are seeing strong growth in some parts of the country, amid a shortage of properties.

The supply-demand imbalance has helped to ensure that buy-to-let properties remain one of the highest yielding mainstream investments in this country, according to HMRC data analysed by ludlowthompson.

The figures reveal that total rental income has increased by 55% in the last five tax years. By contrast income from savings and cash ISAs have continued to be low due to low interest rates.

The London-based estate agent says that the data confirms that buy-to-let property remains a relatively low-risk investment that outperforms other asset classes over the long-term, including government bonds, cash ISAs and shares.

ludlowthompson adds that buy-to-let landlords are also benefiting from downward pressure on interest rates on mortgages when adding to their portfolio as a result of continued competition between banks for mortgage business.

Stephen Ludlow, chairman at ludlowthompson, said: “Buy-to-let property is now a key part of individuals’ investment portfolios and retirement income.

“Residential property not only offers investors a stable, regular monthly income, but also offers long-term capital growth. While house prices are not a one-way bet, property has historically been far less volatile than other asset classes, such as shares.

“The fundamental supply-demand imbalance remains with the pool of potential tenants getting larger each year. This is still the case in London, despite Brexit jitters.

“Some of the increase in rental income will also be from rental growth, which means that rents are largely growing with inflation. Additionally, wage inflation has been growing steadily already over the past few months, and, historically, rental increases track wage increases. Ultimately, these figures highlight the real term growth in returns – the fundamental point behind any sound investment.”

Poll: Do you think buy-to-let remains a sound investment?

PLACE YOUR VOTE BELOW

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    Probably just putting bit towards the governments increased take, via tenants.

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    Just covering our extra costs, doesn't matter what the business it's always the end user that pays, government just too thick to see this !

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    Didht see this coming 🙄

  •  G romit

    Enough said.

    Higher taxes, more regulations = higher rents ! Simples (except for politicians).

  • Paul Barrett

    S24 the tenant tax!!
    My rent increases are 50% more than they would have been to pay for S24.
    No way am I prepared to earn less because of S24.
    So the tenant will have to pay
    So that extra 50% is basically a Tenant Tax.
    I inform all my tenants why my rents are higher than they would have been.
    So tenants are aware of what S24 does and they all think without exception it is a very silly taxation policy.
    They don't like having to pay the Tenant Tax but understand why I have to tax them more by means of larger rent increases.
    Tenant's are definitely more likely to vote Labour than Tory because they know directly the effects of the ridiculous S24 policy.
    There will be far more tenants than new GR home buyers voting Labour.
    So for the Tories S24 is a vote loser.
    Makes you wonder why they bother with a policy that will produce far fewer Tory votes and will result in a substantial net loss of Tory votes.
    Many LL won't be voting Tory either!!!
    Only a total of about 2750 votes spread across about 15 marginal seats prevented a Labour Govt!!!!!
    I'm sure it wouldn't be too hard for disgruntled LL in those marginal seats to not vote Tory next time.
    Such actions could well result in a Labour victory.
    All caused by S24!!!
    So perhaps not a policy to be continued with unless the Tories wish to be out of power! !!

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    Sadly they seem convinced their wild thoughtless policies will will generation rent votes , hence the landlords bashing is ramping up from every angle

     
  • phil dillon

    S24 is having the desired effect that Govt want, kill off PRS, and build the BTR sector with large corporates such as Aviva. Old boys from Eton .

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    PRS will never be killed off just got to adapt BTR will never fill the void

  • Paul Barrett

    The day I see large private housing developments being built as BTR is the day that LL would be concerned.
    BTR is only concerned with flats in city centres.
    BTR will never be interested in individual properties.
    They want scale from the get go.
    Could we see an Aviva private housing estate!?
    Somehow I doubt it as most competing developers want to extract all the profit out of selling.
    The substantial loss of the new build premium would cost pension funds billions.
    Extracting such profit over decades via letting the properties is a financially dubious proposition.
    But I suppose pension funds can take a 100 year view!!
    Though I doubt much of the new BTR crap will still be standing!!!?
    LL would do well to invest in houses etc and leave the city centre flats etc to the big boys.
    BTR can never compete nor would they want to with individual residential rental properties.
    There will always be a very strong demand for these.
    This is where the little LL should invest.

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    Extra income is a long way from extra profits but councils can not see this as they are not for profit.

  • Paul Barrett

    It is hard for most of the lefty councils to understand that extra income DOESN'T automatically correlate with additional profit.
    They simply DON'T understand that PROFIT is required to produce a taxable income.
    So that is after all costs to produce that profit is what should be taxable.
    Something that lefty councils never understand and now we have the idiotic Osborne policy of S24.
    We really do have economically illiterate politicians who simply DON'T understand that without PROFIT there is insufficient all other income to tax for all the services that the UK populace desires.

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    Paul, i like your term '' lefty councils'' but aren't all councils '' lefty'' in the way they work, my local council, Breckland in Norfolk, are strongly Tory controlled, but the way they work can only be described as lefty, councilors and council employees are very anti the self employed and private owned business, they don't like us because we succeed and most of them are life's failures stuck in dull boring jobs.

     
  • Paul Barrett

    @a townshend

    Yes I totally agree with your construct that irrespective of political colour that most couuncils effectively operate as Communist enterprises.
    They are not subject to the pressures of a private business.
    They can never go bankrupt as Govt will always bail them out; not so a private LL who can lose his shirt!!
    If only Councils would understand and recognise the issues of being a LL then perhaps there might be a more harmonious relationship with both parties.
    It is a problem that all private enterprises have with Councils.
    I'm sure if it was put to Councils they would prefer all private enterprise to be eradicated and for all services to be provisioned by State and Local taxation.
    Realistically Councils will NEVER choose to work with private enterprise to provision effective service delivery.
    Councils have an ideological stance that all private enterprise is bad and State provision is the best.
    As LL at the proverbial coalface we see directly the contempt that ALL councils have towards private LL.
    That contempt is equally felt and more by LL for Councils.
    Such contempt is costing Councils fortunes.
    It rarely costs private LL anything as they are mostly all capable of operating their business without any interraction with HB tenants or the Council.
    Gone are the days when HB were profitable.
    HB tenants are no longer needed or required by PRS LL.
    This has come as a bit of a shock to Councils who are only now realising how desperately they need PRS LL.
    Well now such LL are no longer interested in anything the Councils have to offer.
    Engaging with private LL would greatly assist Councils but so wedded are Councils to their anti-private LL stances that even attempting to engage with LL in a belated attempt to be seen to trying to engage with them falls on stony ground.
    On principle I would refuse to engage with any Council.
    I loathe and detest the way Councils behave towards private LL and it would be a cold day in hell before I ever engage with Councils.
    Contempt DOESN'T even half-way describe the way I feel about Councils
    I'm sure many LL feel this way.
    Councils seem to have a total disconnect with the PRS.
    They really shouldn't be surprised that now private LL wish to have nothing to do with them after the way they have previously and now behave.

    A classic example of this disconnect is my East Herts District Council expects me to issue an AST to a prospective tenant BEFORE their HB entitlement has been approved!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!????????????????????

    So if then it turns out that the tenant is NOT entitled to HB I then have a tenant with no means to pay rent.
    I would then have to evict the tenant!!!!!!!!!!!!!!!!!!!!!????????????
    There is simply no way I would issue an AST without a validated way that rent would be paid.
    Yet my stupid Tory Council expects me to issue a tenancy agreement without any means to pay for it at the outset of that tenancy.
    That just shows you the total disconnect with business reality as evidenced by the ridiculous policies of EHDC!!!!!!!!!!!...........................a Tory Council.

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