Single-property landlords struggling with losses
Thursday 26th July 2012
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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