Landlords are getting younger, more professional and feeling optimistic, according to a new survey. New legislation, tax changes and stamp duty increases have brought a lot of changes to the private rental sector. This includes the type of landlord who has responded to these changes – and seen opportunities. A survey by Simple Landlords Insurance shows the demographic of the average landlord is changing too. Whilst the majority of landlords own a single property, the bulk of the UK’s housing stock is in the hands of bigger landlords. The research also shows that it is these bigger landlords who are most optimistic about the future and have plans to expand further. About 38% of landlords with a single property are planning to sell, compared with 8% of landlords who have more than two properties in their portfolio.
Interestingly, there is also a new emerging community of UK landlords who are young, well-informed and are consciously investing in rental properties. According to the research, younger landlords in the 25 to 34 age bracket own an average portfolio of 2.16 properties, while the 45 to 54 age group owned 1.48. The younger, emerging landlords are also investing differently and have a diverse portfolio. New entrants are attracted by holiday lets, with 22% of new landlords investing in this sector, while flats attract 16% of the new entrants. Owners of Houses of Multiple Occupancy are feeling the most optimistic, with 43% planning to buy and just 4% thinking about shrinking their portfolio.
Home Safe Scheme founder, Carl Agar, says the traditional landlord has seen their return-on-investment falling with the introduction of new regulations and tax changes. However, for people coming into the market, the returns are still favourable compared to what they would see if they put their money into a savings account. They see definite opportunities in the rental sector. They are adapting to the changing market rather than resisting it or seeing it as a threat. The research shows that it is the landlords at the larger end of the market, or those aspiring to acquire a healthy portfolio, who are the ones who are least fazed by the recent changes. They are ready to take advantage of the increasing demand for rental properties and stable house prices. Simple Landlords Insurance director of underwriting, Tom Cooper, said that financial services have to keep up with the changing market and introduce products which will be of most benefit to landlords looking to thrive in the rental market.
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