Why should election candidates care about landlords this June?

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Because we’re important. Obviously.

I’ve even got the numbers to prove it. 

Here goes….

Firstly, there’s a lot of us

According to the HMRC approximately 2.35 million individuals declared income from private residential property in the last reported year.

If each of these landlords only owned one property, and we know that hundreds of thousands own more, and each of these properties was worth only the national average house price of £218,000 (ONS January 2017) then those 2.35 million people’s investments would be worth £512,300,000,000.

And we generate a lot of income

Assuming that each property achieved the national average yield of 5.8 per cent (NLA Quarterly Landlords Panel Q1 2017), then this stock generates £29,712,400,000 per year.

An awful lot of which is pumped back into the UK economy

NLA members tell us that around 32 per cent of this income (NLA Quarterly Landlords Panel Q1 2017) is accounted for by management and running costs – pushing £10,467,968,000 into the service economy in the form of property management, insurance, utilities and professional fees.

Using a conservative estimate assuming that 51 per cent of landlords have outstanding credit secured against their properties, at a typical loan to value of 59 per cent (CML ‘profile of UK private landlords 2017), we can say that a further £3.7 billion of interest is serviced annually (assuming typical rates of c.2.5 per cent) – allowing banks to lend.

This leaves around £18,874,432,000 of potentially taxable income (or about £8,032 per landlord).

We also pay a lot of tax!

Excluding the 4 per cent of landlords who earn too little to pay any Income Tax this provides the exchequer with an income of approximately £4,964,177,600 per year (that’s £4.9 billion by the way).

Remember, that’s based on each landlord owning only one property. In reality there are about 2.5 times more properties in the UK’s PRS (PWC 2015), meaning the figure could be more like £12.4 billion.

This assumes that 61 per cent of private landlords pay the basic rate, 33 per cent the higher rate and 2 per cent the additional rate. It also excludes the 15 to 20 per cent of private landlords holding property in a company and therefore paying corporation tax.

It’s not just us, we employ 4 times more people than M&S*…

According to Companies House there are more than 113,000 people employed in the letting and operating of their own real estate, who contribute £24.1 billion to the economy and a further 98,000 individuals employed in the management of real estate on a fee or contract basis adding a further £6 billion.

Not to mention the 155,000 people employed as estate or letting agencies adding another £9 billion.

Therefore we can estimate that there are approximately 366,000 jobs connected with the sector valued at almost £40 billion in 2015 alone.

(For more on this aspect check out the UK Association of Letting Agents blog).

What are the chances any of this will be reflected in manifestos over the next couple of weeks?

 

*M&S corporate reporting suggests the company employs c. 83,000 staff.

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