Amateur landlords struggle to stay in profit

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by Gill Montia

Specialist research agency, BDRC, has published the results of its latest quarterly survey of private landlords in the UK.

The research is based on the opinions, attitudes and expectations of more than 500 British landlords during the three months to the end of September, and the main findings are as follows:

Fourteen per cent of private landlords said prospects for the UK’s private rental sector looked “very good” up from only 10% in the fourth quarter of 2007.

Eighteen per cent reported “very good” prospects for rental yield over the three months to the end of December, down from 22% a year ago.

While increased demand for rental properties and cheaper house prices improved the outlook during the third quarter of 2008, the proportion of landlords optimistic about prospects for capital gain was substantially lower than when the survey began, in October 2006.

This is illustrated by the fact that 60% of respondents said they were focused on rental yield, with 17% planning to increase rents before the end of the year, by an average of 5.7%.

Meanwhile, 38% of respondents had already increased rents in the past 12 months.

In addition, over 20% of landlords stated that they intend to buy new properties before the end of the year.

However, it is professional landlords who are surviving the credit crisis well, as only 63% of investors with one property reported that they were in profit, compared to 96% of landlords with portfolios of 20 or more rentals.