Buy-to-let landlords 'generally earn twice UK average salary'

by Gary Whittaker

A new industry survey has highlighted the current health of the UK buy-to-let market and the considerable financial rewards available to landlords.

Research conducted by BDRC Continental on behalf of BM Solutions has found the average landlord expects to earn a yearly income of almost £60,000 from rent payments, which is more than twice the average national salary rate of £27,174.

At present, the average landlord has a portfolio of eight or nine properties with a total value of £1.2 million, with two-thirds relying on buy-to-let funding through mortgages when making a purchase.

Confidence in the sector was also shown to be on the rise, as 61 per cent of landlords are confident on the prospects for buy-to-let, up from 54 per cent during the same period last year. Meanwhile, optimism regarding capital gains rose from 27 per cent to 49 per cent.

Over the past financial quarter, average UK rental yields increased by 0.2 percentage points to 6.2 per cent, which was roughly in line with the 6.1 per cent rate seen over the last 12 months. Yields increased most in the East Midlands and Wales, achieving a return of 6.7 per cent, while Yorkshire and the Humber saw the lowest returns at 5.7 per cent.

The report also revealed that 78 per cent of landlords view their property as their pension, with 64 per cent of those in the buy-to-let market considering themselves to be professional.

Phil Rickards, head of BM Solutions, said: "It's easy to see why people are attracted to the buy-to-let market; it offers a tangible investment which can provide the long-term returns that some other assets won't.

"For those people considering the opportunities that this market presents, it is however important to understand the financial and legal commitments being a landlord brings and to ensure that you undertake the right level of research and due diligence."

With recent research from Countrywide revealing that the cost of renting is falling when compared to the cost of buying a home, the rented property market is likely to remain healthy for some time.

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06-June-14General Lettings News