The most recent gauge of landlords’ views on the current state of play in the rental market and key trends has recently been released by Paragon.
Here are some highlights:
>The total number of buy-to-let loans in December 2014 was 18% up on December 2013, at 17,300
>45% of landlords surveyed expect tenant demand to grow in coming months
>35% of landlords prefer to invest in terraced houses
>The average rental yield being achieved is 6.2%
>The number of BTL mortgage products available to landlords has increased by 22% since March 2014.
A survey of landlords by BDRC Continental in Q4 2014 shows that the average landlord sets aside 17% of their gross rental income as contingency for both planned and unexpected costs, which include voids & arrears, property maintenance, and professional fees. This is something that we at Northwood advise all our landlords to do, so that there is a fund of money available for unexpected expenses.
Void periods and arrears needed to be factored in as an extended period of time when money is not coming in has the potential to become a considerable expense and severely impact on cash flow. BDRC Continental research suggests that almost half (48%) of landlords surveyed used income from other rental properties in their portfolio to cover financial shortfalls created by voids. Landlords with portfolios of up to four properties (28%) were more likely to rely on ‘day job’ earnings to cover this.
Of course, for Northwood Guaranteed Rent scheme landlords, “void” and “arrears” can be removed from their calculations … and vocabulary!
Meanwhile, a new survey suggests 40% of landlords derive their main source of income from letting property.
The study of 500 landlords conducted earlier this month reveals that just over a third of landlords have full time jobs and another five per cent have part time employment. The rest are either retired or full time landlords.
The research also shows that around 20 per cent of landlords enjoy annual yields of between 15 and 30 per cent – a huge figure – while a quarter of landlords have yields between five and 10 per cent. Full/source story
For most landlords, the outcome of the 2015 General Election is very much a key issue. Exciting times ahead for sure!
Northwood is one of the largest and most recognised lettings agents in the U.K. and the leading supplier of Guaranteed Rent to give landlords complete peace of mind.
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