Nine out of 10 buy-to-let landlords are profitable in the UK

Cautious optimism in the private rented sector as rents rise

Amid all the gloom surrounding the buy-to-let sector – with less favourable tax treatment, new rules and regulations, and, of course, Brexit tainting all the property news headlines – you would be forgiven for thinking that buy-to-let investment is a dead duck. Well, all those headlines certainly affect sentiment, but there is one thing that they can’t change: the attractiveness of property as an investment asset.

The reality is that more landlords are making money today than ever before. A whopping 88% of buy-to-let landlords make a profit from their letting activity, according to the latest Landlord Panel research from BM Solutions (BMS: the buy-to-let brand of Lloyds Banking Group).

Smaller landlords are most profitable

While almost nine out of 10 landlords are profitable, it appears that smaller landlords are faring better than those with larger portfolios. This is probably because of the larger your portfolio, the more profit you are likely to make from rental income.

With the changes to tax relief on mortgages affecting those who fall into the higher rate tax brackets, profitability is most likely to hit those earning the most from their property portfolio. This appears to be the case, with 75% of landlords who own between 11 and 19 properties reporting that their profitability has decreased.

Larger landlords are more likely to sell a property in 2019

Perhaps because of their decreased profitability, larger landlords are twice as likely to sell at least one property this year than smaller landlords. Overall, 23% of landlords told BMS that they are considering selling a property this year.

15% of landlords expect to add at least one property to their portfolio this year.

Rental yields are expected to increase

Across the UK, rental yields average 5.6%, and the number of landlords expecting this to rise has increased by 2%. Rental yields were highest in outer London, the North East, and Yorkshire and Humber, and lowest in London (at 4.7%).

Improving confidence that rental yields will rise doesn’t surprise us. Demand for tenancies remains strong, though there are regional differences. The BMS data shows that demand is growing most strongly in the East Midlands and the South West, while it has fallen in the East of England, South East, and central London.

Rental prices are rising faster than inflation

A separate report from HomeLet shows that rental prices in the UK are rising faster than inflation, and rose in 11 out of 12 regions over the last 12 months.

Rents in January are 2.5% higher than they were in January 2019, a definite indication in the underlying strength of demand in the private rented sector. London rents rose by 3.7%, to an average of £1,588 per month. London may have been most affected by the Brexit uncertainty, but the increase in rental price is evidence of demand continuing to outstrip supply.

Void periods are still a bugbear to landlords

According to BMS, landlords are concerned about void periods (perhaps the biggest drag on buy-to-let profits). The average void period in the UK is 25 days. That’s nearly a whole month’s rent, should a tenant leave your property.

Combined with the experience of our staff, the processes and systems we use help our landlords reduce this cost. The average void period for our landlords is just 16 days, helping our landlords achieve £307.50 in additional rental income on average if they do suffer a void period.

(Watch Ezytrac’s General Manager Mike Scrace-Hollamby in his one-a-day video explaining how Ezytrac achieves such great results for our landlord clients.)

In summary

Summing up, buy-to-let landlords are cautious of the future. With the next phase in the change in tax relief on mortgage interest coming in this year, and other changes like the ban on tenants’ fees and electric safety also occurring, this caution is justified. However, the reality is that supply in the private rented sector is inadequate compared to demand, rents are rising, and almost nine in 10 landlords run a profitable buy-to-let business, whatever the size of their portfolio.

Perhaps the biggest concern for most landlords is the possibility of a costly void period. Which is why we work extra hard to ensure we get the best tenants faster for all our landlord clients. Contact us on

Cautious optimism in the private rented sector as rents rise

Amid all the gloom surrounding the buy-to-let sector – with less favourable tax treatment, new rules and regulations, and, of course, Brexit tainting all the property news headlines – you would be forgiven for thinking that buy-to-let investment is a dead duck. Well, all those headlines certainly affect sentiment, but there is one thing that they can’t change: the attractiveness of property as an investment asset.

The reality is that more landlords are making money today than ever before. A whopping 88% of buy-to-let landlords make a profit from their letting activity, according to the latest Landlord Panel research from BM Solutions (BMS: the buy-to-let brand of Lloyds Banking Group).

Smaller landlords are most profitable

While almost nine out of 10 landlords are profitable, it appears that smaller landlords are faring better than those with larger portfolios. This is probably because the larger your portfolio, the more profit you are likely to make from rental income.

With the changes to tax relief on mortgages affecting those who fall into the higher rate tax brackets, profitability is most likely to hit those earning the most from their property portfolio. This appears to be the case, with 75% of landlords who own between 11 and 19 properties reporting that their profitability has decreased.

Larger landlords are more likely to sell a property in 2019

Perhaps because of their decreased profitability, larger landlords are twice as likely to sell at least one property this year than smaller landlords. Overall, 23% of landlords told BMS that they are considering selling a property this year.

15% of landlords expect to add at least one property to their portfolio this year.

Rental yields are expected to increase

Across the UK, rental yields average 5.6%, and the number of landlords expecting this to rise has increased by 2%. Rental yields were highest in outer London, the North East, and Yorkshire and Humber, and lowest in London (at 4.7%).

Improving confidence that rental yields will rise doesn’t surprise us. Demand for tenancies remains strong, though there are regional differences. The BMS data shows that demand is growing most strongly in the East Midlands and the South West, while it has fallen in the East of England, South East, and central London.

Rental prices are rising faster than inflation

A separate report from HomeLet shows that rental prices in the UK are rising faster than inflation, and rose in 11 out of 12 regions over the last 12 months.

Rents in January are 2.5% higher than they were in January 2019, a definite indication in the underlying strength of demand in the private rented sector. London rents rose by 3.7%, to an average of £1,588 per month. London may have been most affected by the Brexit uncertainty, but the increase in rental price is evidence of demand continuing to outstrip supply.

Void periods are still a bugbear to landlords

According to BMS, landlords are concerned about void periods (perhaps the biggest drag on buy-to-let profits). The average void period in the UK is 25 days. That’s nearly a whole month’s rent, should a tenant leave your property.

Combined with the experience of our staff, the processes and systems we use help our landlords reduce this cost. The average void period for our landlords is just 16 days, helping our landlords achieve £307.50 in additional rental income on average if they do suffer a void period.

(Watch Ezytrac’s General Manager Mike Scrace-Hollamby in his one-a-day video explaining how Ezytrac achieves such great results for our landlord clients.)

In summary

Summing up, buy-to-let landlords are cautious of the future. With the next phase in the change in tax relief on mortgage interest coming in this year, and other changes like the ban on tenants’ fees and electric safety also occurring, this caution is justified. However, the reality is that supply in the private rented sector is inadequate compared to demand, rents are rising, and almost nine in 10 landlords run a profitable buy-to-let business, whatever the size of their portfolio.

Perhaps the biggest concern for most landlords is the possibility of a costly void period. Which is why we work extra hard to ensure we get the best tenants faster for all our landlord clients. Contact us

Cautious optimism in the private rented sector as rents rise

Amid all the gloom surrounding the buy-to-let sector – with less favourable tax treatment, new rules and regulations, and, of course, Brexit tainting all the property news headlines – you would be forgiven for thinking that buy-to-let investment is a dead duck. Well, all those headlines certainly affect sentiment, but there is one thing that they can’t change: the attractiveness of property as an investment asset.

The reality is that more landlords are making money today than ever before. A whopping 88% of buy-to-let landlords make a profit from their letting activity, according to the latest Landlord Panel research from BM Solutions (BMS: the buy-to-let brand of Lloyds Banking Group).

Smaller landlords are most profitable

While almost nine out of 10 landlords are profitable, it appears that smaller landlords are faring better than those with larger portfolios. This is probably because of the larger your portfolio, the more profit you are likely to make from rental income.

With the changes to tax relief on mortgages affecting those who fall into the higher rate tax brackets, profitability is most likely to hit those earning the most from their property portfolio. This appears to be the case, with 75% of landlords who own between 11 and 19 properties reporting that their profitability has decreased.

Larger landlords are more likely to sell a property in 2019

Perhaps because of their decreased profitability, larger landlords are twice as likely to sell at least one property this year than smaller landlords. Overall, 23% of landlords told BMS that they are considering selling a property this year.

15% of landlords expect to add at least one property to their portfolio this year.

Rental yields are expected to increase

Across the UK, rental yields average 5.6%, and the number of landlords expecting this to rise has increased by 2%. Rental yields were highest in outer London, the North East, and Yorkshire and Humber, and lowest in London (at 4.7%).

Improving confidence that rental yields will rise doesn’t surprise us. Demand for tenancies remains strong, though there are regional differences. The BMS data shows that demand is growing most strongly in the East Midlands and the South West, while it has fallen in the East of England, South East, and central London.

Rental prices are rising faster than inflation

A separate report from HomeLet shows that rental prices in the UK are rising faster than inflation, and rose in 11 out of 12 regions over the last 12 months.

Rents in January are 2.5% higher than they were in January 2019, a definite indication in the underlying strength of demand in the private rented sector. London rents rose by 3.7%, to an average of £1,588 per month. London may have been most affected by the Brexit uncertainty, but the increase in rental price is evidence of demand continuing to outstrip supply.

Void periods are still a bugbear to landlords

According to BMS, landlords are concerned about void periods (perhaps the biggest drag on buy-to-let profits). The average void period in the UK is 25 days. That’s nearly a whole month’s rent, should a tenant leave your property.

Combined with the experience of our staff, the processes and systems we use help our landlords reduce this cost. The average void period for our landlords is just 16 days, helping our landlords achieve £307.50 in additional rental income on average if they do suffer a void period.

(Watch Ezytrac’s General Manager Mike Scrace-Hollamby in his one-a-day video explaining how Ezytrac achieves such great results for our landlord clients.)

In summary

Summing up, buy-to-let landlords are cautious of the future. With the next phase in the change in tax relief on mortgage interest coming in this year, and other changes like the ban on tenants’ fees and electric safety also occurring, this caution is justified. However, the reality is that supply in the private rented sector is inadequate compared to demand, rents are rising, and almost nine in 10 landlords run a profitable buy-to-let business, whatever the size of their portfolio.

Perhaps the biggest concern for most landlords is the possibility of a costly void period. Which is why we work extra hard to ensure we get the best tenants faster for all our landlord clients. Contact us on +44 0 1522 503 717. to find out how you can benefit from effortless property management with Ezytrac.

Live with passion

Brett Alegre-Wood

By |2019-03-20T07:55:10+01:00April 18th, 2019|Landlord lessons, Property Management|0 Comments

About the Author:

Brett has over 20 years experience in all facets of property, he owns various companies centred around property and is the driving force behind the education and training at Ezytrac. His companies have sold over £850 million in UK and London property and he manages over 1250 properties through his estate agency chain. Today he shares his time between UK, Australia and Singapore. He is married to Arlene and together they have 4 kids.