Amateur landlords’ long-haul investment

Nearly nine out of 10 (87%) landlords regard managing their rental properties as a profitable pastime, with only one in 25 (4%) regarding it as their full-time profession, Alliance & Leicester Mortgages’ new annual Landlord Index reveals.

More than half (57%) of today’s landlords say they invest in buy-to-let property to build up assets for the future, fund their retirement, or pay their children’s university fees, rather than to supplement their monthly income. This suggests many have opted to invest in bricks and mortar rather than traditional pensions, although one in ten landlords (11%) say they still earn half or more of their monthly income from their buy-to-let properties.

Almost a third (31%) of landlords are over 55. Nearly two out of three (64%) landlords say they plan to continue renting out their property, as they are happy with the income they are getting - with the period most plan to let property averaging around 18 years. One in five (21%) see it as a short-term investment and plan to cash in on it within the next few years.

Women favour long-term growth

With more than four out of 10 (41%) landlords women, the research highlights differences in approach to buy-to-let investment between the genders, with women far more cautious than men.

Half of female landlords (50%) say they invested in their buy-to-let specifically to build up assets for their retirement – compared to 40% of men. But one in five (21%) men say making a monthly income as the grounds for purchasing their buy-to-let property – compared to just one in 10 women (13%). Around 22% of male landlords make more than a quarter of their income from their rental property, with nearly two thirds (65%) keen to continue expanding their portfolios and actively consider buying more buy-to-lets in the future - compared to 45% of female landlords who are planning to take on more properties.

Stephen Leonard, Director of Mortgages at Alliance & Leicester, says: “It is encouraging to see landlords taking a measured, long-term approach to their buy-to-let investments. Releasing the equity built up in a rental property over a number of years could provide a crucial lump sum to cover future needs, like university fees, helping their children onto the property ladder, or even acting as an alternative pension pot. But whether it is to provide a pension for retirement, or a monthly income, landlords’ ambitions suggest buy-to-let will remain an important part of the overall UK housing market.”