Corporate landlords earning twice as much from buy-to-let as private owners

A new property index that tracks the fortunes of corporate landlords claims they are breathing new life into buy-to-let, while private landlords struggle.

The BRIX index, compiled by investment firm BondMason, found the average private landlord had a post-tax return of 16.9% over the past three years, but investors in corporate residential landlords have seen a return of 37.7%.

BondMason argues that corporate landlords are boosted by investment in the build to rent sector and the ability to offset debt costs against their tax bill – something now being denied to private landlords.

Stephen Findlay, chief executive of BondMason, said: “Historically the UK rental market has been dominated by private landlords, but that is now changing following the increased tax burden and new regulations which make it harder to generate a positive income each year.

“These companies are filling the gap left by smaller private landlords exiting the market, satisfying the strong demand for rental properties, particularly from first-time buyers continuing to be priced out of the housing market in many areas.

“Our expectation is that we may soon see the peak in terms of the proportion of houses owned by individual private landlords, and that proportion will start to decline, unless tax legislation is changed or reversed.”

* According to the latest lending data from UK Finance, the buy-to-let mortgage market is in the doldrums, with just 4,800 purchase loans in February, 7.7% down on the same month last year. The figure compares with 24,800 first-time buyer loans, up 4.1% year on year.

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12 Comments

  1. Siroje26

    Corporate landlords earning twice as much as private landlords! Because private landlords were crucified by George Osborne’s discriminating punitive taxes! Even in socialist France interest is tax deductible for all investors. Unbelievable under a Conservative government! Get ready for corporate and housing trust rental ghettos in the future. It will be back to the sixties council estates, all renters living together. Let’s see what happens to the Tory vote in the next elections.

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    1. Gromit

      This faux Tory Government is doing the bidding of it’s big corporate masters aka Tory donors to reduce competition by driving out small Landlords and driving up rents charged by those that remain.

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    2. Will2

      Regretfully there is no party of common sense. There is no politician with true leadership qualities that has the wellbeing of the country  at heart. The current bunch are self serving party political clones playing to their own party. There are too many ministers to the point of stupidity; next we will have a Minister for zits if anyone can spot him/her!

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  2. Will2

    It’s the Cons looking after their own. Private landlords have no political party worthy of voting for.

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  3. James Wilson

    This is a very welcome change.  Previously “private landlords” enjoyed egrecious, unfair tax advantages.  Someone who is a private individual, with no company, was allowed to offset mortgage interest against their income from a BTL.  Why on earth should they be able to do that?   I can’t deduct the interest payments on my car from tax.    Here is a message for the “amateur army” of BTLers:  IF YOU WANT TO BE TAXED LIKE A COMPANY, SET UP A COMPANY.

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    1. Mothers Ruin

      It’s interesting that you see it that way. Here’s how I see it. My best landlords with the best properties are now looking to sell. My woodchip walled brown cord carpeted landlords are not. I’m starting to feel sorry for tenants……..

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    2. Will2

      James. Perhaps tax relief should be removed from all mortgages to achieve the level playing field you seek. Higher cost result in higher rents or less supply whatever you political ideology.

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  4. PossessionFriendUK39

    Use of your car is PERSONAL,

    Buying, investing and Taking the RISK, is business.

    The common principle being All business are allowed to offset expenses before tax.

    Apply Osborne’s pernicious principle across All businesses and the Country would collapse.

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  5. GeorgeHammond78

    The index is cobblers anyway – it’s the economies of scale that drive the net higher returns. Also, it doesn’t factor the corporate costs of achieving those yields……

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    1. SteveWF

      The corporate returns are based on the share price movements and divided payouts from the listed corporate landlords. So all costs are factored into the analysis, and the performance is the actual return you would have achieved if you’d invested in those shares.

      More details are here: https://www.bondmason.com/bondmason-brix

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  6. Anthony Kerrigan

    I don’t believe the sums……….

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    1. SteveWF

      Further details are here: https://www.bondmason.com/bondmason-brix 

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