Profits for buy to let landlords totals £177 billion

Buy to let landlords have been one of the biggest beneficiaries of the property market in recent years, making £177 billion in capital gains alone

According to recent statistics published on The Financial Times, improved property prices and increased tenant demand have allowed landlords to make £177 billion in capital
gains in the past five years.

This figure excludes any additional profits or income they have made from rent paid by their tenants.

Private rented housing dominates market

Buy to let landlords have also supported the private rented housing market by increasing the level of growth experienced.

Overall, private rented housing is now worth a massive £1 trillion – growing by more than half (57 per cent) since the 2008 financial crisis and hitting this milestone figure for the first time.

According to commentary on the statistics, this growth has been fuelled by the larger number of people who are purchasing properties with the intention of letting them out.

Pensioners have been earmarked as a particular pivotal group in this growth. A report from Direct Line for Business at the end of 2014 claimed changes to pension rules would mean an increase in “silver landlords” who chose buy to let investments as a way of increasing their retirement funds.

Supplying tenant demand

As well as benefiting from improved property prices, landlords are also seeing profits boosted by high levels of demand.

Savills’ Director of Residential Research Lucian Cook described the current rental market as “fundamentally undersupplied” – a fact which means landlords can capitalise in opportunities to make the most of their property portfolio.

In order to bridge the widening gap between rented housing supply and demand in the future, Cook said the British Government must do more to encourage buy to let investors.

This means improving their ability to add new homes to their portfolio and building more properties for rent.

Please see another article from Jeni about the growth in the Buy to Let market which should lead to a closing of the gap between supply and demand in the market.