UK welcomes growing number of part time landlords

 
UK welcomes growing number of part time landlords

The UK saw a swelling in the number of part time landlords partaking in the property market after the financial downturn hit people's ability sell in 2008. A large number of would-be sellers put their homes up for rent in order to be able to move at a time when it was virtually impossible to sell. 

However, even as the market has become more fluid and it has become far easier to sell a property than perhaps ever before, Brits are still looking towards the ever strong rental market as a place in which they can make money. 

According to a new study, the number of people classed as part time landlords - those with one property only - is higher than it has ever been before. 

Research conducted by LV Landlord Insurance found that some one in 20 people across the country are now landlords on this basis, bringing in an average of just over £600 per month to supplement their income.

This amounts to a combined income of more than £28 billion among part time landlords, which represents a sizeable chunk of the rental market and shows just how strong the sector has become among people who don't want to own a portfolio and just a single property. 

The research found that the highest rental income is found in the south-east and London, where the average part-time landlord can expect to bring in somewhere in the region of £800 and £1,000 respectively. 

It added that 60 per cent of this on average goes on fees and borrowing costs (many use their rental income to pay a mortgage on a new home), as well as management costs and maintenance. 

This leaves the average landlord with 40 per cent - a healthy profit - which has enticed many people to invest money into this most lucrative of marketplaces. 

However, many investors are still not aware of all the rules and regulations that govern them when they are trying to become a part-time landlord. While most people with a sizeable portfolio will be knowledgeable about the sector, how it works and what their own obligations are, those who are looking for a passive way to make a little more money may not be.

This makes it vital that people spend even a little time just looking at their own obligations before they decide to make the move and become a landlord on a part time basis. 

LV said that by far the biggest error that any new landlord makes is to not have their property properly checked out by a Gas Safe Register engineer. It's something that can easily pass people by without them noticing, but not having the home checked by a registered engineer can cost landlords a fine of up to £20,000, which seriously dents potential profit in the long run. 

Other landlords are not making sure that their property is correctly maintained and as safe as possible. A tenant living there for the long term may seem like a great benefit given that you won't need to deal with void periods or look for someone to replace them, but it's so important to make sure you keep checking the property regularly. 

If not, and someone should suffer a trip or a fall that is found to be a result of the condition of the property, tenants can actually sue their landlord, a fact that many don't know, again hitting them severely in the pocket.

John O’Roarke, managing director of LV, said there are also other little considerations that landlords need to be making: "Renting out a property can be a great way to cover your costs if you are unable to sell or want to hold on to a home and make some extra money from it, but it is not without risk.

"Landlords not only need cover for any damage to their property but they also need to think about their tenants and how they will house them if the property becomes uninhabitable, as well as the lost rental income."

So how can landlords or prospective landlords make sure they are operating within the regulations? LV advised that the best practice is to ensure that you regularly stay in touch with the local authority in order to make sure that you are up to date with any changes to laws and don't fall foul.