Research reveals the type of person likely to become a PRS landlord in the UK
New research shows that UK landlords renting out properties in the private rented sector are middle aged, well educated and mostly work in the private sector. The last two decades have witnessed a huge rise in the number of households living in the private rented sector in the UK and as a result the number of private landlords as a proportion of the population has more than doubled.
Previously, very little has been known about private landlords in the UK but now a new research report from a think tank reveals the demographic, socio-economic, financial and rental characteristics of private landlords in the UK. The research from the Strategic Society Centre also compares landlords to other home owners, private tenants and the general population and found that the average age of private landlords is 48, but average age of renters is 32.
Mean financial wealth of private landlords is £75,103, and the median is £20,500, compared to £9,506 and £398 among tenants. Landlords are significantly more likely to have grown up in owner occupied housing than other groups and well educated with two in five having a degree or higher qualification. Also 34% of landlords live in London or the South East.
The research also found that the majority, 72%, of landlords have just one rental property, although 12% have three or more and 80% have a buy to let property, whereas a quarter have a second home. The average rental income a landlord receives is £500 per month, although a quarter receive rental income of £900 or more per month and 60% receive more from earnings than rental income.
Quote from PropertyForum.com : “The UK government has signalled what could be a significant change in pension fund regulations with proposals to allow SIPPS and general pension funds to hold residential property.”
Some 77% are in employment, mainly in private sector jobs. Among employed landlords the median gross monthly earnings is £2,400 and 60% of employed landlords earn £2,000 or more per month. One half of landlords had saved money in the past two years, with one in five saving £5,000 or more. Some 49% of landlords have a main home that is worth in excess of £300,000 and 52% have a home with four or more bedrooms.
The report also shows that 45% have total financial assets worth £30,000 or more, with 26% having financial assets worth £70,000 or more. Most landlords, at 78%, feel that their income is enough to meet the cost of everyday outgoings. Most are confident about the rental market with 63% suggesting that investing in property is the safest way to make money and 49% think it is the best way to save for retirement while 62% think they could cope for a year or more if their income dropped by a quarter.