According to new research by Paragon Mortgages, the average landlord's buy-to-let portfolio has expanded in the third quarter of this year, with the typical number of properties owned now standing at 14.9, up from 13.5 in the second quarter of 2014.
These statistics follow the recent announcement that the government plans to enforce tougher regulations on buy-to-let mortgages under new EU regulations, a change that industry experts expect to limit the number of properties available in the rental sector.
Despite the economic recession that was experienced in the UK between 2008 and 2013, the size of landlords' buy-to-let portfolios has been steadily increasing over the same period. Paragon's report revealed that, when the portfolio survey began in 2002, the average number of properties owned by landlords was 9, but by 2012 this number had increased to 12, and reached 13 in 2013. These statistics show that, over the last 12 years, the number of properties in an average landlord's portfolio has increased by around 5 – an impressive number considering that the same period saw the price of houses become increasingly difficult to afford.
Following on, the study also documented what landlords were planning to do to the size of their portfolios in the future. The report found that 15% of the landlords surveyed were planning on adding to their portfolios in the fourth quarter of 2014, of which 63% planned to purchase terraced houses (55% more than in the second quarter), while 27% planned to purchase semi-detached properties.
Direct Line for Business has also posted findings that suggest landlords are benefiting more than ever from a large property portfolio. Their results showed that collectively, landlords in England are earning a total of £32 billion per annum (£2.7 billion a month) from their rental properties.
Considering the average inner-city London property generates an income of around £19,596 a month, it is not surprising to learn that London landlords earned the most money from their rental properties. The total recorded amount of £14 billion per year is more than the combined total collected by landlords in East Anglia, the East Midlands, the North East, the West Midlands and Yorkshire put together.
Outside of London, landlords in Leeds, Birmingham and Manchester were the next highest earners with £565 million, £521 million and £401 million respectively.
The current property market is extremely diverse and that means landlords can add a wide variety of properties to their portfolios. These can range from one bedroom flats aimed at young professionals living in a city, to eight bedroom HMOs which are perfect for student accommodation. Landlords also have the opportunity to purchase a property and refurbish it with the intention of selling it or renting it out later on to recoup the refurbishment costs and get a return on investment, although a landlord looking to rent out a property to students will need to cover HMO management costs. By working with an experienced estate agency such as CPS Homes, landlords can keep abreast of the latest HMO news and keep the costs of HMO management down.
Are you a landlord looking to expand your property portfolio? We have a wide range of properties available to buy today in many areas across Cardiff, including Cardiff Bay, Canton, Penylan, Roath and more. What's more, we're a professional lettings and estate agency that specialise in property redevelopments, helping our clients achieve the best return possible on their investment. Please contact us today at any of our three branches in Cathays, Cardiff Bay or Roath to arrange a face to face meeting with one of our friendly members of staff where we'll discuss all of the property management options available to you.