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Posted by Let Alliance on May 24, 2012
More than a quarter of landlords in the Private Rental Sector owe nothing on their properties, and 37% rely on them for a living, according to market research company BDRC Continental.
Its latest Landlords Panel survey reveals that 28% of landlords own their letting portfolio outright with no mortgage, 39% have buy-to-let mortgages on their property or properties, and 33% have a mixture of mortgaged and non-mortgaged properties.
The average number of buy-to-let loans held is 7.7.
Landlords currently view property as more profitable than other investments. Of the 28% who own their portfolio outright, 41% bought their properties with money which had previously been invested elsewhere, 23% bought with non-invested cash, while 29% have fully paid off past buy-to-let borrowings.
The trend towards owning investment property outright may go some way to explaining why such a healthy proportion (37%) of landlords make their living from their property portfolios, although the proportions increase with the number of properties held.
One in ten (11%) landlords with one property are able to make a profitable living from letting, compared to 38% of those with 5-10 properties, and 72% of those with 20+ properties.
Of those who rely on buy-to-let mortgages to finance their properties, 39% said that they saw no real difference in the buy-to-let deals currently on the market.
When asked, 74% agreed that the buy-to-let market needs greater innovation, and 89% agreed that the sector would benefit from greater competition.
Mark Long, director for BDRC Continental, said: “According to our research it is clearly possible to make a full time, profitable living from private letting, and certainly those with larger property portfolios are more likely to be able to do so.
“BTL mortgage borrowing remains important for the majority of private landlords and our research suggests that there is still room in the market for providers to listen to their customers and provide a product suite better suited to their needs.”