Rental margins fall

Nia Williams

November 10, 2009

The survey reveals that they have seen their profit margins fall in the third quarter of 2009.

Looking in more detail at the responses, just over a quarter of all landlords either break even or make a loss. Of those, 7% make a small loss and 1% ‘a large loss’. Respondents also said that prospects for letting are declining, having experienced an increase in Q1 and Q2 this year.

Despite the apparent challenges in the market, private landlords continue to enter the market with 20% of current landlords saying they have entered the market in the last 24 months – the most challenging times since the survey began in 2006. However, not all have entered through choice – one in 20 have been forced into letting by being unable to sell their property.

Mark Long, director at BDRC, said: “With 2009 characterised as a year of survival for many landlords, we are starting to see signs of a brighter future into 2010. Despite the current profitability situation, as shown by the findings in the latest wave of the Landlords Panel survey, prospects for rental yields do appear to be improving in line with our landlords’ optimism index. The UK’s private landlords are a resilient bunch and will opt for a strategy that allows them to protect their income and portfolio.”

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