Half UK Landlords Own Property Outright

Nearly half of the UK’s landlords own their properties outright, according to surprising survey results from the Council of Mortgage Lenders (CML).

49 per cent of respondents to the study owned their properties, an unprecedentedly large amount given that the government 2010 Private Landlords Survey found 77 per cent of landlords used a buy-to-let mortgage in order to purchase.

61 per cent of landlords are currently over the age of 55, a marked increase from the results of a similar survey conducted by CML in 2004, when just 24 per cent were within this age bracket.

The average annual gross rental income was between £7,500 and £17,300, however just 5 per cent of those surveyed used their rental income as their main funding method.

Given the increasingly harsh measures imposed on landlords by the government, it is unsurprising that a small proportion are aiming to downsize their portfolios in the long term. 6 per cent of landlords are looking to dispose some of their assets over the next 12 months, a figure which rises to 14 per cent when taking a 5-year view. However, only 21 per cent cited tax changes as a reason to sell, a figure which rises to 36 per cent for professional landlords. This is likely to be due to the nature of the tax changes, which negatively affect those with the largest portfolios and highest incomes.

CML Director General, Paul Smee, said: ‘While the overall findings are encouraging and offer a reassuring picture of relative stability, there is a certain irony in the researchers’ conclusions that the landlords who will be most affected by the government’s tax changes are those at the most professional end of the sector – those with large, leveraged portfolios.

 These landlords will be particularly hard hit by the changes in the treatment of mortgage interest and may choose to divest or moderate their property holdings. Given the government’s longstanding interest in professionalising the sector, policymakers will need to be closely attuned to the risk of unintended consequences and, indeed, own goals.’

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