The number of part-time landlords in the UK is increasing, as more people are looking to rent property for additional income, new research has revealed.
A study from insurance firm LV= discovered that more than seven per cent of Britons are now renting property for this purpose, earning an average of £678 per month. Of these accidental landlords, 55 per cent found themselves in the position after moving to a new property and then renting their old one. While some people chose to buy to let, others were forced into renting their old homes as they were simply unable to sell them.
LV= has warned that many of these part-time landlords may not be meeting the regulations which govern the private rented sector. In many cases, a letting agent is not used as the house owners manage the property and the letting themselves.
More than a quarter of people who were self-managing their properties had not had a gas safety check carried out in the past 12 years, putting them at risk of a £20,000 fine and prosecution. This could wipe out any potential returns on a rental property, so it is essential that part-time landlords are aware of their responsibilities. Letting agents can handle the regulatory side of the rental market but consideration needs to be given to how such a move may impact upon potential returns.
“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,” said John O’Roarke, managing director of LV= landlord insurance.
Part-time landlords in London can expect to see the highest rents with typical monthly incomes of £1,079 received from their property. Homes in the south-east also attract high levels of income, with the average property bringing in £816 per month.
According to LV=, the typical landlord has a pre-tax profit of around 40 per cent on their properties, once overhead costs are taken into account.
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