Your Business and Industry
The BTL by Foundation Q2 BTL Barometer
In our Q2 2024 BTL barometer, brought to you in conjunction with the Pegasus Insight Landlord Trends research report, we evaluate the trends which are impacting your landlord clients and how their portfolios are currently shaping up.
The latest data shows that the average NRLA landlord has been letting property for close to 18 years. Within this, almost half (45%) are ‘very experienced’ and have been active as a landlord for over 20 years. This level of experience is reflected in the older age profile of NRLA members, with 77% aged 55+ and 39% retired. Those who have been operating for longer, typically, have larger, more diverse portfolios which achieve a higher yield on average vs. those newer to the PRS.
Drilling down to portfolio details, a typical portfolio in Q2 was estimated to be worth £1.7m, generating a gross annual income of £71k. With an average portfolio size of 7.6, this equates to the typical property being worth £224k and generating £779 a month in rental income.
Most properties with borrowing requirements are utilising interest-only mortgages, with this accounting for over 1 in 3 of all PRS stock. Half of properties are owned outright, with this more common amongst landlords operating at the smaller end of the PRS.
Two-thirds of respondents said they had made a conscious decision to become a landlord. For 14%, it was a result of circumstance, with this reflected in accidental landlords’ smaller than average portfolio sizes (4.8 vs. 8.4 for intentional landlords).
In terms of location, landlords with property in the North West and the East Midlands had the largest average portfolio sizes in Q2, at around 10 properties. At the other end of the spectrum, Outer London landlords typically had the smallest portfolios, at 4.9 properties on average.
56% of landlords were reported to operate in the South, which is around the same proportion as those who have property in the North and Midlands combined. Just over half of landlords only let property in the area where they personally live currently, while 30% also operate in other regions, and 14% exclusively let property away from their personal residence.
The profile of rental stock also varied significant by region, with terraced houses the predominant property type in the North and Midlands and flats much more common in London and the South East. 22% of landlord respondents have HMOs within their portfolio (3.3 on average), rising to 35% among portfolio landlords (4+ BTL mortgages).
This data represents a strong reflection of how portfolios are stacking up in the current economic climate and we hope it can be of some use to you and your landlord clients.
