According to the latest data from BDRC Continental’s Independent Landlords Panel survey, the proportion of landlords making a loss has doubled from 8% to 16% for Britain’s smallest landlords – private landlords renting out only one property.
Those with more properties are doing much better, with 40% of those with 5 to 10 properties in their portfolios making a profitable full time living from letting. It holds true for those with more as well, with 69% of those with 11 to 19 properties and 68% of those with more than 20 properties making a healthy profit also.
The Q1 report showed that there had been a fall in rental arrears for the first time in a year, but unfortunately we are seeing now in Q2 that the trend has not been maintained, going from 45% back to 49%. The data shows that 9% of single-property landlords experienced voids in the last three months, lasting an average of 69 days – a little over two months.
The report also suggests that there may be a dark cloud looming up ahead, as the Q2 data points to a third consecutive decline in perceived tenant demand, with a continued shift from ‘increasing’ demand to ‘no change’. As things currently are, however, more landlords are experiencing demand than seeing it decline (net position +27%), but nevertheless, the dark cloud could yet see to dampening that.
Mark Long, Director for BDRC Continental, the UK’s largest independent market research agency, commented on the latest Landlords Panel findings, saying, “It is a tough time to be a private landlord if you have only one property in your portfolio. Over the last quarter profitability has clearly taken a dive. Regardless of their size, there is no question the private rental sector relies on them, and whilst a third may aspire to increase their property portfolio, they will only be able to achieve this goal and add to Britain’s privately rented housing stock if they can make a profit from that one property.”
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