At least 80% of full time landlords are making a good living from renting out buy to let homes, according to a new report.
Even 75% of accidental landlords are running profitable buy to let businesses despite a slowing demand from tenants, says research for landlord lending specialist BM Solutions.
The study suggests many landlords expect to buy more buy to let homes this year to cash in on the market.
However, many landlords believe the market is reaching saturation point with just over a third believing demand to rent a home was rising at the end of 2013, compared with 52% reporting 24 months earlier.
One of the biggest problems landlords reported was void periods.
A third said they had voids – periods without tenants – during the past three months, although the average length of time a rental home remained empty had dropped five days to 59 days.
Landlords with several properties were able to swallow the rental loss by subsidising property costs with profits from other buy to lets, said the lender.
Phil Rickards, head of BM Solutions, said: “While there will always be elements of the rental market that fluctuate, overall stability will continue to ensure that lettings attract both professional and amateur landlords.
“By increasing portfolios landlords are also able to further spread the risk of void periods and tenants in arrears, which is important when considering the long-term investment rather than focusing on the short-term gains.”
BM Solutions is part of the Lloyds Banking Group and the leading UK buy to let mortgage provider.
Rival buy to let lender Paragon Mortgages recently reported a rise in profits and increasing numbers of applications for landlord loans.
The slowdown in tenants seeking homes is explained by lenders as partly due to the government Help To Buy scheme for first time buyers and tenants staying in their rented homes for longer.