One in every four UK homeowners has used or is using their property to generate income, new research from Just Group has revealed.
The study found that 43% of people living in London, and 37% in the North-East, have used their property to generate income, the areas where this was most likely. Just Group announced the least likely areas for homeowners to generate income through property were in Wales with 15%, and Northern Ireland with 9%.
In a survey of more than 4,000 people, 10% responded by saying they had generated income through renting out an investment property. Other methods used were to rent a room to a lodger or through a rental site, to remortgage or to release equity from the property, or to refurbish and sell the property.
The most common reasons people gave for using property to generate income was to supplement their regular income and for home renovations – both at 21% – with preparing for retirement at 17%, giving money to children also at 17%, a major one-off purchase such as a car at 16%, and paying off a mortgage at 15% as other popular reasons.
Among those who said they had not used property to generate an income, 45% of responding adults said they did not need the income, 25% said they did not want the hassle of managing it, 17% revealed they did not feel comfortable investing in property, 12% suggested they did not know how to go about it, while 9% were worried about the tax implications.
Commenting on the latest analysis, group communications director at Just Group, Stephen Lowe, said: “For many people, buying a home is a major ambition and their property will be their biggest asset.
“With longer lives and more responsibility on individuals to build up a pension, we would expect the use of property to supplement other income to increase in the coming years.
“How they do it could change significantly as the rewards and incentives change. Higher taxes on buying second properties and on rental income could lead to a slowdown in lettings, while more innovative and accessible equity release products could lead to more people in later life tapping into property wealth to meet their retirement aspirations.”
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