Bigger cities may offer higher income and more job opportunities, but this comes at a price. While average monthly rent in the UK, excluding London, was 747 British pounds as of the end of 2019, Londoners paid more than double. Renters in the UK spent between one fourth and one third of their income on rent but London, South West and South East saw a higher rent to income ratio than the country average.
Landlords in the UK have varying portfolio sizes – from one property operated as a private individual, to more than 100 properties, operated as part of a company. Although rents keep rising and demand is high, the landlords that are planning to sell a property from their portfolio in the next year are almost twice as many as those that are planning to buy a property – a trend of increased willingness to sell that has been visible for the past three years. With the tax changes on buy-to-let in place since April 2017, landlords have been able to deduct less of the mortgage interest against tax, until in April 2020, tax reliefs were no longer possible.
Just as any other sectors, the privately rented sector is not immune to impacts from the coronavirus (COVID-19). Tenants who suffer loss of income might struggle to cover their rental costs, while landlords might experience longer void periods or disrupted income from rent, affecting their mortgage payments. Nevertheless, as of May 2020, just 15.5 percent of landlords facing disruption applied for a mortgage holiday.