Breaking it down regionally, across the 11 council districts in Northern Ireland, all but two areas mirrored this trend with an increase in landlord insurance policies. The two areas with a decline are often classed as the more tourist-centric, holiday areas of Northern Ireland, which understandably have faced challenges during 2020 lockdowns and bans on holiday visitors – Causeway Coasts & Glens and Fermanagh & Omagh both saw a decline of 4%.
The top three areas with the largest increase were Mid Ulster with a 52% spike, Ards and North Down with 42% and Newry, Mourne and Down at 33% – all higher than the Northern Ireland overall average of 29%.
14.4% of these new landlords have either bought a property within the last 2 years, bought a property in the last year or are just about to make a purchase – making use of the government’s stamp duty holiday, which the Chancellor extended in the recent Budget.
Although the majority of the 8,000 landlords researched by insurance and personal finance comparison experts CompareNI.com have owned their property for five years or more, there has been a gradual year-on-year increase in recently owned properties within the last 5 years that supports this emerging trend of small and first-time landlords.
CompareNI.com reveals the majority of those looking for landlord insurance, own just one property – suggesting this is a buy-to-let investment rather than their full-time job. The extension of the tax break revealed in the Budget could encourage even more people to dip their toes into this buy-to-let market.
The data also showed that the average age of a landlord in Northern Ireland is 49, suggesting these property investors are, on average, more than a decade from retirement and looking to invest their skills and savings in a more long-term asset that may offer higher returns than other investment options out there. And with only 52% of landlords using cash to purchase during 2020, the lowest figure on record* – buy-to-let is an increasingly viable option for many UK buyers, even those with a relatively modest amount of capital to invest.
The average rent landlords can expect from their investments differs dramatically across the UK, with data from Statista revealing that Greater London has the highest average at £1,556, while the cheapest region is the North East where the average rent is just £539. The UK average is currently £832 with Northern Ireland significantly below that at £651.
The best interest rate available from savings accounts currently stands at just 3%. By contrast, the average rental yield in the UK is currently 5.2%***, and buy-to-let property in some parts of the country even offers rental yields in excess of 7%.
However, there are overheads a landlord needs to consider such as a managing agent, utilities inspection reports and certificates, landlord licence (£500 every 5 years), safety equipment such as fire alarms and extinguishers and routine maintenance to the property. Landlord insurance is another vital element but by comparing policies on comparison platforms there are competitively priced policies available.
Founder of CompareNI.com, Northern Ireland’s largest insurance comparison website, Greg Wilson, comments: “The pandemic has created a temporary shopping spree within the housing market and with the government’s extension of the stamp duty holiday announced in the budget, the rush on the housing market is expected to last into the summer. I would bear in mind that this flurry is likely short-lived, as the economic aftermath of the pandemic may take several months to unfold.
“However rental properties haven’t gone untouched by the crisis with many tenants also on furlough or facing redundancies and social distancing creating physical barriers to the properties making routine maintenance and repairs difficult. It is perhaps more important than ever to ensure landlord insurance policies are thorough, accurate and up to date so that landlords are fully protected should a claim be needed.”
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