The figures come from a report published by mortgage firm Kent Reliance which shows that landlords earned £44.3 billion from rental income in the year to March. In addition, landlords also earned £67.2 billion in capital gains.
This means that the total earned by landlords has grown by £5.8 billion compared with the same period a year ago. The boost in earnings has been driven by rising rents with properties in London and the south-east making most profits.
Average UK monthly rents rise by 3.9%
Average monthly rents have now risen by 3.9% on average in the first quarter and now stand at £832. This equates to a monthly rental income for UK's buy to let landlords of nearly £4 billion. That's the biggest rise in earnings, the report reveals, since autumn 2013. With the changes to pension pot rules being brought in last April, more money is expected to flood into the buy to let sector. Kent Reliance is also forecasting that the number of rental homes in the UK will soar from 4.8 million to 5.5 million by 2020.
One in five UK households in private rental sector This means that around one in five of all UK households will be in the private rental sector.
The report also reveals that the sector has risen by more than three and a half times in value since 2001 to £990.7 billion.
Kent Reliance is owned by OneSavings Bank, and its chief executive, Andy Golding, said: “Buy to let has moved from being a niche asset class to one that now rivals the stock market.
“Tenant demand is strengthening and landlords have benefited from a structural change in the country's housing market.”
London's voluntary landlord scheme is 'failing'
Meanwhile, a voluntary scheme that was launched in London with the aim of improving parental standards has only attracted 12% of the capital's landlords. Launched in 2014, the London Rental Standard offers landlords and letting agents a badge for meeting criteria aimed at boosting property conditions.
The landlord and agent must also carry out quicker repairs and maintenance to be eligible under the scheme which combined seven different accreditation schemes under a single umbrella.
Criticism of the low sign-up, only 14,350 landlords have currently joined, is being led by the Labour group on the city's council.
Assembly member Tom Copley said: “We need real change but renters are being left with little protection from landlords.”
He added that for improved peace of mind for London's tenants, the scheme should introduce longer tenancy agreements, no fault evictions and for rent increases to be capped.
