Landlords who rent out just one property are struggling with voids and rent arrears, says market research firm BDRC Continental.
Its landlords panel says that the proportion of small landlords making a loss has doubled from 8% in Q1 2012 to 16% in Q2.
By contrast, those with more properties fare far better: 40% of those with 5-10 properties, 69% of those with 11-19 properties and 68% with 20-plus in their portfolios are making a profitable full-time living from letting.
Arrears have also become more of a problem, while voids are a concern for single-property landlords: almost one in ten have experienced voids in the last three months, and these lasted an average of 69 days.
A future concern for all private landlords is that the latest data points to a third consecutive decline in perceived tenant demand, with a continued shift from ‘increasing’ demand to ‘no change’.
At present, however, more landlords are experiencing demand than seeing it decline (net position +27%) but this emerging trend could suggest more trouble on the horizon.
Commenting on the latest findings, Mark Long, director for BDRC Continental, said: “It is a tough time to be a private landlord if you have only one property in your portfolio. Over the last quarter, profitability has clearly taken a dive.
“Regardless of their size, there is no question the private rental sector relies on private landlords and, whilst a third may aspire to increase their property portfolio, they will only be able to achieve this goal and add to Britain’s privately rented housing stock if they can make a profit from that one property.”
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Comments
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dave - I know I appear doom and gloom sometimes.....
@single owner - if only more landlords thought like that! The vast majority expect tenants to be grateful for their drab properties in dire need of redecoration etc, they then wonder why it won't let against newer properties.
Utter drivel. I have been renting out my one bedroom flat in Sutton for the past 3 years with absolutely no problems whatsoever. Ensure the property is in excellent condition, pick your tenants carefully, do the appropriate checks and limit the AST to an initial 6 months. Eject at the first sign of problems when contract ceases or renew for a further 6 months if all is well. It's not rocket science.
If any single let landlords are looking for advice on turning negative cashflow properties into positive cashflow. Please drop us an e-mail and we will endeavour to assist.
info@ikos-investments.com
Regards
John Raiye
Still, you can't go wrong with bricks and mortar.
I know I appear doom and gloom sometimes,but lets face it things are pretty bad
the only comparrison to the uk debt buuble bursting is japan where property has fallen for over 20 years and the kids left the country and the population is the same as in 1950
where then for buy to let?
Hardly a surprise when you look at the yields on offer at the sort of prices paid in recent history. Plenty of investors are relying on neverending capital gains for BTL to make any sort of financial sense.
and thats with 0.5% interest rates!
one can only imagine what would have happened if rates had stayed at 5.75%