24% Of Landlords Earn In Excess Of £50,000 Per Annum From Property

landlords' annual income
Although 32pc of landlords earn less than £15,000 per annum from their properties, 24pc earn in excess of £50,000, according to new research.

However, most landlords (44pc) fall in the £15,000-£50,000 range, while 20pc derive income from multiple sources, the survey from Landlord Vision has revealed.

Where rental demographics are concerned, 72pc of landlords rent to families or professionals, while 28pc operate non-standard tenancies such as student housing. Additionally, 52pc are members of an appropriate organisation, the most popular of which is the National Residential Landlords Association (NRLA).

As for problems, 40pc mentioned ‘constantly changing legislation’ as the greatest concern regarding their property business, whereas 26pc cited a variety of reasons such as non-payment of rent, bad tenants or property voids. For those troubled by costs, the fear of an imminent rise in interest rates presents the most challenging concern.

Despite 44pc reporting no negative impact on their property business resulting from the Coronavirus pandemic, 21pc had experienced problems in collecting the correct rent and 12pc had suffered voids.

Majority aim to diversify portfolios

While many landlords are ignorant of or have not prepared for Making Tax Digital (MTD), 30pc say they will plan for it sometime this year, 19pc say they will not do anything until absolutely necessary and 43pc are unsure as to how long it will take them to get ready for MTD.

London and the South East comprise the regions having the most users of Landlord Vision, 92pc of whom would recommend the website to others. The survey also confirms property investors are keen to use the internet to find information, the most popular sites being Landlord Vision and the NRLA.

With regard to letting agents, 52pc use one at some point in running their property businesses, paying an annual amount ranging from £1,000 to £5,000, with £2,000 the average spend.

As far as the future is concerned, 68pc intend to diversify their portfolios in the coming years to concentrate on holday and short-term lets, 27pc plan to sell up in the next 10-20 years and 44pc have every intention of continuing to let property until old age.

PRS not in decline

The survey demonstrates that, despite frequent predictions that landlords are ready to sell up and quit the sector, this is not a viable proposition for many who see letting their properties as a lifelong vocation.

Yet the increasingly hostile legislative agenda directed at the PRS, often presented as the reason they are selling up, is a major cause of concern to them. Generally speaking, they understand the sector well and judging by the number of people for whom property is not their only source of income and those who plan to diversify their property model, there are still plenty of incentives to invest in property.

The cost of letting property is not an issue. Taking into account the fact that a fair number of landlords derive income from sources other than property, 68pc earn more than £15,000 per annum from their portfolios, and despite the data suggesting that landlords do not earn much disposable income, only 10pc state cost as a major issue affecting their businesses. Of much greater concern to them is the threat of rising interest rates and increased taxes.

Coronavirus has had a negligible effect on the sector. Although there has been much concern over whether landlords have been impacted by Covid, the survey shows a significant number did not experience any adverse effect. Landlord Vision found this surprising but uncovered no inherent bias in the questions or respondents that might have influenced the outcome.

That said, a small number of landlords in the survey were affected by issues caused by the pandemic, the majority of which concerned receiving the incorrect amount of rent, something that has been borne out by news media reports.

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