HMRC is targeting residential landlords with ‘nudge letters’
3 years ago | 20 comments
50,000 landlords have left the PRS since 2019
11:04 AM, 25th November 2022, 3 years ago
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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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Member Since February 2016 - Comments: 1056
1:00 PM, 26th November 2022, About 3 years ago
Reply to the comment left by Borrieboy at 25/11/2022 – 17:18
Yes, BTL has been a good source of revenue for H.M. Government but that will continue to dwindle until the CGT income stream runs out. It’s not only the tenants, the builders, plumbers and other tradesmen who will miss us when we are gone – the cash cow is drying off and it will be a while before the Build to Rent calf produces much milk for government coffers. Of course, that will be the least of their worries as most of the 20% of the population formerly housed by the PRS search in vain for an alternative.
Member Since December 2014 - Comments: 9
4:04 PM, 26th November 2022, About 3 years ago
I have just completed an eviction. It took 6 months to complete and was done with the tenant being helpful (not responding to court papers) and I was still receiving rent (housing benefit) the tenant asked me to do this so the council would house her. The very same day but in the evening of the eviction another tenant phoned and asked us to do the same! We agreed providing they agreed to work with us and continue to pay the rent. In another property the tenant has asked to buy it (happy days) now for the other one. I can’t wait to leave all the hassle behind. 1 tenant had been there 6 years the other one 4 years, and the one who wants to buy has been there 16 years. God help the council trying to find homes for these people.
Member Since April 2017 - Comments: 10
9:10 AM, 27th November 2022, About 3 years ago
Only 50,000 have left the sector? I thought it would of been much higher. That’s less than 2%.
Unfortunately the figures doesn’t track the landlords from 2019, so the headline is misleading. It doesn’t count new landlords to the market, especially as HMRC have been cracking down on landlords not declaring income from property over this period.
Member Since February 2016 - Comments: 1056
12:40 PM, 27th November 2022, About 3 years ago
Reply to the comment left by Coops at 27/11/2022 – 09:10
A more useful statistic would have been the number of properties which have left the sector. Not only are landlords incorporating in record numbers, many are also reducing their portfolios at the rate of one a year to take advantage of capital gains tax allowances. If HMRC figures only count numbers of private landlords, presumably some of those leaving the sector are balanced by some joining, though I expect most new landlords invest as a limited company..
Member Since November 2022 - Comments: 1
7:57 AM, 28th November 2022, About 3 years ago
I am one who is leaving, although I only have 2 houses rented out, the hassle the tenants cause outweighs the financial benefits. In future I will stick with commercial property only.
Member Since December 2021 - Comments: 161
9:18 AM, 28th November 2022, About 3 years ago
The other statistic recently released by the govt, is the 500k net immigration figure.
Ignoring the rights/wrongs/origins discussion, this increase in population, that is over and above natural growth, needs to be housed eventually.
If landlords are backing out of PRS, that supply is obviously reducing at the same time demand is disproportionally growing. No wonder hotels are getting block booked and Serco want to lease our properties!
The maths just don’t work.
Member Since May 2015 - Comments: 2204 - Articles: 2
9:19 AM, 28th November 2022, About 3 years ago
Reply to the comment left by Brian Jones at 28/11/2022 – 07:57
Note to cabinet: now is the time to start attacking commercial lets.