50,000 landlords have left the PRS since 2019

50,000 landlords have left the PRS since 2019

11:04 AM, 25th November 2022, About A week ago 17

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It has been revealed that the UK has 2.74 million unincorporated landlords and in 2020-21 they earned £41bn from rents, but the data also shows that 50,000 landlords have left the private rented sector (PRS) since 2019.

The figures from HMRC report in 2021 there were 2.71 million individuals and 300,000 partnerships declaring a rental income on their tax returns down from 2.79 million in 2019 to 20

Of the unincorporated landlords, 89% claimed some form of expenses and the figures show that property income is concentrated in London.

The capital is home to 16% of unincorporated landlords – but they account for 23% of all unincorporated landlord property income.

The next most profitable region for landlords is the South East, followed by the East of England and the South West.

UK’s most common type of landlord

HMRC says that the UK’s most common type of landlord who is letting property is private individuals, and they account for most of the rental income declared.

However, the impact of Covid can be seen in the property income declared figures from 2016 to 2017 when landlords earned £46 billion – but by 2020 to 2021 there is an 11% fall to £41bn.

HMRC explains this drop as being driven by a fall in both the number of individuals reporting property income and average property income they declare.

The figures show that from 2019 to 2020 there were 2.79 million unincorporated landlords, but this had fallen to 2.74 million last year.

That’s a shocking 50,000 landlords giving up their property in just three years.

Average income that unincorporated landlords earned

The HMRC’s figures also show that the average income that unincorporated landlords earned from UK property remained stable at £17,000 between 2016 to 2017 and 2019 to 2020.

But the average income then falls to £15,000 from 2020 to 2021.

While HMRC doesn’t explain the anomaly of income falling, it appears that the rise in rents seen this year hasn’t been high enough to cover the number of unincorporated landlords who have left the PRS.

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Comments

Seething Landlord

12:04 PM, 25th November 2022, About A week ago

Interesting figures but the missing factor is how many of those 50,000 unincorporated landlords have disappeared because they have incorporated. Similarly with the reduction in declared rental income, it is probably now featuring in company accounts.

Borrieboy

12:05 PM, 25th November 2022, About A week ago

Just finished up my rental income numbers to submit to HMRC and this is the gig;
Total return on investment on 2 properties, both with 100% occupancy and rent receipts, is a big fat 2.9%.
Little wonder private landlords are selling up..
...perhaps those "housing charities" whining about what anti-social, greedy pariahs us private landlords are, might consider whether the level of risk/reward we are faced with is actually reasonable or sustainable, or should we just remain a social service in the absence of govt. investment in social housing?

Paul Essex

12:39 PM, 25th November 2022, About A week ago

The fall in income is not an anomaly, it is just people reducing their portfolios rather than stopping completely.
I personally know several landlords who currently have good tenants who will sell rather than re-let if the property becomes vacant.

Judith Wordsworth

13:53 PM, 25th November 2022, About A week ago

I’m unincorporated, as the CGT to incorporate was prohibitive. I only have 1 rental property left (of 3) and my daughter is living in it.

Not only because I could see what further legislative landlord bashing was in the offing, but also not even making enough to pay income tax on due to rent owing, repairs for tenant damage, property upgrading - replacement double glazing by freeholder, etc and the stress caused by an abusive tenant I sold one per year from 2020.

Rentals have always been to those on benefits as, rightly or wrongly, believed people should have somewhere to call home. But honestly saddened by my nicely decorated “homes” were not only not looked after by tenants but actually trashed.

Still say the only way for any government to take note of what PRS landlords in the main do is for us to serve s21 on the same day with the same expiry date.

I would have loved a profit of £17k per property per year lol.

Amanda mochrie

14:09 PM, 25th November 2022, About A week ago

Multiple occupancy rules and increasing costs of regulatory burden probably account for some of the drop in profit by individual landlords it did for me before I sold .

TheMaluka

15:38 PM, 25th November 2022, About A week ago

The data shows that 50,000 landlords have completely left the sector it does not show those who have partially left the sector. Statistics can be manipulated to show almost anything and the government is very competent in manipulating figures to show what it wants to show.

Chris Bradley

16:14 PM, 25th November 2022, About A week ago

In the year 2020-2021 my rent dropped, because of lockdown. Students didn't want to pay their rent as universities had sent them home, so rather than loosing all the rent, a deal was struck for reduced rent. Also forlough was 80% wage so some of my tenants asked for a reduction- being nice I gave a reduction, and I know many landlords that did also, so that would account for the reduced rent.
I have started selling my properties as they became vacant, but the new capital gains allowance next year hits my take home,

Borrieboy

17:18 PM, 25th November 2022, About A week ago

Looks like HMRC receipts of CGT are going to rocket by y/end 21-22 and will continue over the coming years as private landlords bail out. Just watch the law of unintended consequences kick in and rents sky rocket for tenancies remaining in the PRS.

TheMaluka

17:43 PM, 25th November 2022, About A week ago

Reply to the comment left by Borrieboy at 25/11/2022 - 17:18
Fear not, Government will interfere when rents rise and make the situation worse. It has an excellent record in this respect.

Rod

18:55 PM, 25th November 2022, About A week ago

The lovely team at iHowz are offering their membership with free tax investigation insurance. Something your accountant would be happy to charge over £250 for.
Even better, you get to take advantage of the current price before they put the price up in 2023.
https://ihowz.uk/

What with rising material costs, energy costs, licencing fees and the proposed EPC improvements, the taxman better hope we are able to collect our rents.

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