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The Q1 2023 BTL Barometer
In our latest quarterly BTL barometer, brought to you in conjunction with the latest BVA BDRC Landlord Panel research, we evaluate the trends which are impacting your landlord clients and how their portfolios are shaping up on the back of some challenging economic conditions.
The average portfolio size remained mostly stable in Q1, as has been the case over the last 12 months or so. Outright ownership and BTL mortgage borrowing continue to be the most common forms of ownership. The typical portfolio is almost equally divided by those with mortgages (3.7 properties) and outright owners (3.5 properties). Fractional and commercially funded property account for a much smaller proportion of rental properties, decreasing further since Q4 by 0.3 and 0.2 properties respectively.
In terms of performance, average portfolio values and gross rental incomes have both increased since Q4. The typical portfolio is reported to have increased to £1.55m (+ approx. £150k compared to Q4 2022) and gross rental incomes have also increased to £70k (+£8k vs. Q4). At an average portfolio size of 7.6 properties, the typical rental property value is £204,079 (+ approx.£17.7k vs. Q4) which generates an annual income of £9,211 or £768 a month (+£79 vs Q4).
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The typical landlord owes approximately £533k in BTL borrowing, although over a third of landlords (36%) have no BTL exposure. Looking at those who have a BTL mortgage, the total average amount borrowed rises to almost £851k, up by almost £125k vs. Q4.
The average amount paid in mortgage interest by leveraged landlords increased by approximately £6.5k in Q1, with the typical amount of interest repaid equating to c.£4,809 per loan and c.£401 per loan per month.
The typical landlord now has 9.6 tenancies across an average of 7.6 properties in Q1. Landlords in Yorkshire & the Humber continue to own the largest portfolios with an average of 12 properties each.
Terraced houses remain the most commonly owned property type at 56%. Landlords with 11-19 properties report the highest incidence of terrace houses at 74%. Individual flats and semi-detached houses are also prominent property types at 48% and 44% respectively. Other property types are less common, although landlords with 20+ properties are much more likely to have these in their portfolio.
This data represents a thorough evaluation of the current BTL marketplace and we hope that it offers some valuable insight from a portfolio standpoint.
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