Report challenges myths of greedy rich landlords amid pressure of regulations

Despite the media narrative of landlords lining their pockets with cash, more than half (51%) of individual private landlords report gross income of less than £10,000, according to Savills.

The research by Savills, which looks at unincorporated landlords and those who hold property in their personal name rather than a limited company, reveals less than 5% of private individual landlords report a gross income of more than £50,000.

The report, which uses data from the English Private Landlord survey, also reveals the “resolve of many landlords is being tested” with mounting regulations.

Only the bravest likely to expand their portfolios

According to Savills, the average private individual landlord reports a gross income of £17,665, which equates to an average profit of £9,021, having deducted finance costs of £2,799, among other elements.

However, the estate agent also reveals 51% of private landlords report gross income of less than £10,000 and less than 5% earn a gross income of more than £50,000.

For those earning less than £10,000, Savills says the decision about what to do next is “mostly binary: hold or, increasingly, sell. Only the bravest are likely to expand in the current environment.”

Growing raft of regulations is a more daunting prospect

Elsewhere in the report, it reveals 45% of landlords hold just one property and a further 37% between two and four.

Savills says these figures represent smaller landlords who are struggling in the market due to mounting regulations.

The report says: “They represent smaller landlords, for whom the growing raft of regulation is a more daunting prospect, in line with more limited resources relative to their corporate peers.”

The data also reveals that 37% of landlords acquired their first rental property to live in themselves, rising to 50% of landlords who hold just one property.

A further 5% to 6% became landlords because they inherited or were gifted a property.

The estate agents say more landlords are reaching a tipping point on whether to sell as they face growing regulations

The report says: “Whether they are temporary or longer-term investors, the resolve of many landlords is being tested more than ever by the fiscal and regulatory environment in which they operate.”

Stamp duty surcharge

The report adds recent stamp duty data shows that in the six months to the end of March, almost 111,000 purchases across England and Northern Ireland paid the recently elevated surcharge for additional homes.

During last year’s Autumn Budget, Chancellor Rachel Reeves stunned investors by boosting the stamp duty land tax (SDLT) surcharge from 3% to 5% for those buying additional properties.