Landlords earn twice annual wage through buy-to-let

03/06/2014 By Mark Long

The average buy-to-let landlord earned twice the average UK annual wage through rental income alone, new figures from BVA BDRC suggest.

Research conducted by BVA BDRC on behalf of BM Solutions found the average landlord could expect yearly income of almost £60,000 from rent payments, more than twice the average wage of £27,174.

The study, which investigated the state of the buy-to-let market, revealed that the average landlord had a portfolio of eight or nine properties with a total value of £1.2m. One-in three, however, did not have an exit strategy, financial plan or growth strategy in place. Two-thirds of landlords relied on buy-to-let mortgages to purchase properties.

The sector appeared to remain an attractive alternative investment, with yields continuing to remain strong across the country. The study found that in the past three months the average yield grew to 6.2% across the UK. The East Midlands and Wales provided the best returns for investors at 6.7%. This was reflected in increased confidence in the sector from landlords, with 61% positive about the year ahead compared only 54% the year before.

The study showed that buy-to-let offers a tangible investment which can provide the long-term returns that some other assets won't. This is making the sector increasingly attractive to investors.

Those considering the buy-to-let market, however, should consider the financial and legal commitments which come with the investment. Future landlords should ensure they undertake the right level of research and due diligence to maximise their chances of success in the sector.