TMW Rental Income Analysis Q2 2017

Transcription

1 TMW Rental Income Analysis Q

2 Gross Rental Income Analysis Q Methodology We asked landlords to self-select their annual gross rental income. This report outlines the results along with rental trends and future rental intentions. The basis for the analysis in this report is derived from the following question: Over the last 12 months, in which band is the gross rental income you receive from your residential letting portfolio? The average gross rental income earned in the last 12 months is,000, down by 9,000 since Q1 and returning to previous levels. Trend Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 T11

3 Gross Rental Income Analysis Q Overall The average gross rental income earned in the last 12 months is,000, down by 9,000 since Q1. This level of income is more in line with the data collected during the second half of Annual Gross Rental Income 0-4,999 3% Average:,000 BTL landlords are generating a gross rental income ( 68k) which is 66% higher than that of unencumbered landlords ( 38k). 5,000-9,999 11% 1 in 4 landlords propose to increase rents in the next 6 months. 10,000-19,999 20,000-49,999 18% 33% 50, % ,999 7% 7,600 38% 26% 100, ,999 7% Annual rental income per property Increased rents in last 12 months Plan to increase rents in next 6 months 150, , , , ,000 or more 3% 2% 3% T11

4 Regions 9 of the 12 UK regions achieve a rental income above the national average. Landlords in Outer London and Scotland generated the highest gross rental income in the 12 months to Q at around 70,000. Income was lowest in the North West of England. Landlords in the central London travel zones received rental incomes in excess of 85,000, but our data continues to indicate that rents in all areas of London are continuing to come under pressure, indeed the Zones 1-2 figure has softened by 3,000 since Q1. Standard UK Region London (Outer) 71 Scotland 70 London (Central) 69 South East (excl London) 68 East Midlands 66 North East 63 Spotlight on London West Midlands South West London Zone 1-2: 85,000 London Zone 3-4: 73,000 Yorkshire & The Humber Wales East of England North West T11

5 Rental trends & intentions 39% of landlords think that rents are increasing in the areas that they are letting property, down 9% on Q Just under 4 in 10 landlords have increased rents for at least some of their properties in the last year. 1 in 4 plan to increase rents in the next 6 months. Portfolio landlords will be much more aggressive in driving rental increases. 1 in 3 landlords operating in Central London report that rents are falling locally, with 7% having decreased rents themselves in the last year. Current trend in landlords areas (%) Rents are RISING Rents are REDUCING 10 No change Not sure Across landlords portfolio in LAST 12 months (%) Across landlords portfolio in NEXT 6 months (%) Rents are RISING 38 Rents are RISING 26 Rents are REDUCING 7 Rents are REDUCING 5 No change 52 No change 59 Not sure 4 Not sure 10 T11

6 Portfolio Property type (Landlords were also asked to self define the overall rental yield they currently receive from their letting portfolio - taking into account current rental income, current portfolio value, any mortgages, maintenance and other running costs) HMO Bungalow Flats - multi unit block Terraced house Average Rental Yield (%) Tenant type Average Rental Yield (%) Migrant workers Blue collar workers Students Other benefit claimants Older singles LHA Retired Young singles Older couples Families with children White collar workers Young couples Executive/company lets Portfolio size Semi-detached house Detached house Flat - individual units k 29k 42k 64k 117k 189k T11

7 Financials BTL landlords are generating a gross rental income which is significantly higher (66%) than that of unencumbered landlords. Landlords currently in a financial loss-making situation achieve the weakest rental income at just 22,000 on average. Those completely focused on letting and self-employed as a landlord (21%) generate the highest levels of rental income at 112,000 on average, an increase of 3k on Q1. BTL Borrowing BTL - Yes BTL - No Profitability Employment Status Making a profit Supplements day job Breaking even Making a loss Self-employed landlord Self-employed other Full time employee Retired Part time employee T11