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How Much Did Buy-to-Let Landlords Earn Last Year?

The Buy2Let Shop

The release of new data by mortgage lender Kent Reliance has prompted The Buy2Let Shop to ask; how much money did buy-to-let landlords make in the year to March 2015?

Buy-to-let income

There are two ways buy-to-let landlords can earn profit when they invest their capital into residential property. Firstly, landlords can earn profit through the rent they charge tenants every month to live in their properties.  Secondly, they can generate returns on their buy-to-let investments through capital gains; the profit accrued from the sale of a buy-to-let property.

Landlords earn £112 billion in 2014

A new report from Kent Reliance shows that buy-to-let landlords earned £112 billion in the year to March 2015. They made £44.3 billion through rent, and £67.2 billion via capital gains. Combined, this represents an increase of £5.8 billion from the year to March 2014.

The mortgage lender noted in the report that the rise can be attributed to a number of factors. A key factor was rising rents; average monthly rents expanded 3.9% in the first quarter of 2015, the largest increase since autumn 2013. The report added that pension reforms that came into effect in April 2015, which allow people over the age of 55 with defined contribution pensions to access their savings as a lump sum, should inject more capital into the sector.

Buy-to-let has “come of age.”

OneSavings Bank chief executive Andy Goulding explained why buy-to-let landlord earnings rose in the year to March 2015. He said: “Buy to let has come of age, moving from a niche asset class to one big enough to rival the stock market. Landlords are seeing the benefit of a structural change in Britain’s housing market, with tenant demand ever strengthening.”

Goulding went on to predict the future direction of buy-to-let. He was quoted by the Guardian saying: “Yes, house prices are showing signs of steadying somewhat, but growth remains brisk. Long-term price inflation is not in danger, given the gaping chasm between growing demand for housing and the number of houses being built each year.

“Combined with the dearth of high LTV (loan to value) lending to first-time buyers, this will continue to buoy demand for rental accommodation, as well as landlords’ returns, and the sector will continue to expand.”

The Buy2Let Shop

Buy2Let Shop are the UKs leading estate agent for investment grade property and along with our sister company “The Buy2Live Shop” we offer professional and friendly services to vendors looking to sell their home to investors looking to build their portfolio.

Through our national advertising campaigns and huge network of contacts, we connect buyers with sellers and unlike most high street estate agents, we not only have a large number of listed buyers looking for find their dream home, we also have a database of retained investors, with proof of funds and finance in place.

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