Average Buy-to-Let Portfolio Rental Return Up 18% Annually

Despite the Government’s best efforts to dampen buy-to-let profitability, the average landlord has not only increased the size of their portfolio on an annual basis, but is also enjoying a 18% increase in their estimated total rental income, according to new research.

Ocasa analysed data on current gross rental incomes, the average number of buy-to-let properties in a portfolio and the total rental income per portfolio, as well as how these factors have changed over the last year.

Across the UK, the average buy-to-let investor has bolstered their property portfolio to an average of 8.2 properties in 2022, a 17% increase on the average portfolio size of 6.9 properties in 2021.

At the same time, the average gross rental income of the average property has also climbed by a marginal 0.5% to £7,891.

As a result, the average buy-to-let investment portfolio is now returning an annual level of rental income to the tune of £63,917 – an 18% increase on 2021.

Investors in Yorkshire and the Humber currently boast the largest portfolios with an average of 15.5 properties, followed by the North East (10.8) and East Midlands (10.5).

Buy-to-let investors in Yorkshire and the Humber have also seen one of the largest increases in portfolio size, up 50% year on year, second only to the South West where the average buy-to-let portfolio has increased by 69%.

Central London has seen the third largest boost to buy-to-let portfolio sizes with a 43% increase.

While the average portfolio size in central London is amongst one of the lowest at just 8.3 properties, investors in the area are not only seeing the largest levels of rental income, but they’ve also seen the largest increase in this level of rental income.

In fact, the average buy-to-let portfolio in central London commands an estimated £93,890 in rental income per year, up 42% annually.

The South West has also seen a 42% increase in the estimated rental income of the average buy-to-let portfolio, along with the North West (37%).

Sales and Marketing Director at Ocasa, Jack Godby, commented:

“It’s great to see that, despite the UK Government’s best efforts, the buy-to-let sector has really hit the ground running in 2022.

Like any area of the property sector, investment levels, property prices and rental values can vary drastically from one region to the next and this understandably has an impact on the size of a buy-to-let portfolio, the rent achieved per property and the overall return made.

However, it’s clear that strength is building across the market with respect to an increased level of income.

The fact that only two regions have seen the average portfolio size reduce is also testament to the resilience and consistency of bricks and mortar as an investment vehicle.”