No matter what business you operate in, it is likely that you will look at your rivals and try to gauge how you are performing in comparison to them. Benchmarking is entirely normal and it is often the impetus for growth and development. Therefore, it is natural that landlords will take an interest in how they compare to local rivals and with the average English landlord.
A recent study published by the Ministry of Housing, Communities and Local Government (or the MHCLG for short) has shone a light on private landlords. This report is the first of its kind since 2010, so it has been long overdue.
It transpires that 94% of respondents operate as private individuals as opposed to being part of an organisation. With respect to how much a landlord earns each year, the figure was an average of £15,000 before tax and deductions.
There were some interesting findings in the survey and figures suggest that only 4% of landlords rent their property as their main business. It was also found that rental income only makes up 42% of the average landlord’s income.
More landlords are now holding more than one property
It was found that 45% of landlords own a single property, 38% of landlords own between two and four properties and 17% of landlords own at least five properties. This represents a notable change since the 2010 report. In 2019, 78% of the market was made up of landlords owning one property, but this has fallen to just 45% of the market. There has been an increase in the percentage of landlords holding a larger share of the market, rising from 5% to 17%.
The survey also indicates 59% of landlords are at least 55 years old and that 33% of landlords are of retirement age. 70% of landlords have owned rental property for a minimum of six years and the average length of time that landlords had been active in letting property was 11.5 years.
Rental income is often a boost to a landlord's pension
Given the length of time that many landlords have held property, and the age of many landlords, it is no surprise that 46% of landlords said they preferred owning property to other investment opportunities and that 44% of landlords owned property to boost their pension.
Another notable finding was the difference between landlords and letting agents. It was found that landlords are less willing to let their property to certain groups than agents are, and agents are far more likely to increase rent for a new tenant than a landlord is.
This indicates the tough decisions that a landlord has to make when deciding whether to rely on an agent or go it alone. Most landlords would prefer to retain a strong level of control over who they let into their property but generating additional income from tenants is a positive outcome.
With only 4% of landlords saying they let property to generate full-time income, it is clear that many people in the sector benefit from assistance from others. If you are looking to maximise your return without monopolising your time, please get in touch with Country Properties. We have helped many landlords and we look forward to assisting you.