NRLA Research: Over three quarters of landlords 'worse off'

Around four in five landlords feel they are worse off now that they were five years ago according to a new NRLA report. 

Our research found 77% considered themselves worse off, against 15% who said things were about the same and just 5% who thought they were better off –  the remainder either unsure or new to the market. 

Landlords responding to our quarter three survey said a perfect storm of increased taxation, high borrowing costs and a flood of regulation change has seen them struggle. 

Most of the respondents almost a quarter, 23%, earn under £25,000 from property.

Costs rising

In narrative responses landlords said financial incentives to invest are being eroded, while at the same time costs are increasing, with more expense on the cards for those who will need to pay up to £10,000 a property to meet ambitious new energy efficiency standards.  

One landlord said their mortgage costs had doubled, with insurance premiums up 250% over the last seven years, pointing to the two percentage points increase in income tax up ahead – and new costs associated with the new landlord database – which will eat into profits further. 

Other landlords, still weathering the impact of the loss of section 24 mortgage interest relief, said they feel the Government is trying to force them out of the market through the combination of increased regulation and tax changes. 

The findings come as the Government prepares to start the roll out of its controversial landlord database this December, heaping yet more costs and increased administrative burdens onto landlords and agents.

Are landlords leaving the market?

According to the research more than one in five landlords – 22%  – say they plan to exit the market entirely by the end of next year.  

More than half the landlords questioned, 55%, said they plan to sell off some or all of their portfolio, with just 4% saying they plan to buy and 30% sitting tight with what they have. 

This is despite the latest data from Zoopla showing the number of homes available to rent remains 25% below pre-pandemic levels and 3% lower than a year ago, with the flow of new rental listings falling by 6%.

What is the NRLA doing?

We have commissioned independent research on the real cost of being a landlord, taking into account borrowing, tax and compliance costs, which we will be publishing in the coming weeks and will be a central pillar of our campaigns work in Westminster and Cardiff Bay. 

We are also continuing to campaign for the Government to look again at its landlord database plan, not least as so much of the required information is available elsewhere. 

A robust private rented sector is vital for the social and economic future of the country, and we continue to campaign for pro-investment taxation policies to encourage landlords to stay in the sector and continue to invest. 

We are also asking for a package of financial support to help landlords of the 2.5million homes across the country that will require energy efficiency works ahead of the 2030 deadline.  

The private rented sector plays an important role in providing warm, safe and secure homes to around one in five households in England.  

Government policy needs to reflect that, before it’s too late.