A survey of 4,000 people for Just Group’s My Home, My Future study found there were regional differences as 43 per cent of Londoners and 37 per cent of those in the North East used their property as a source of income.
However, in Wales just 15 per cent said they capitalised on property in this way, while nine per cent in Northern Ireland said the same.
Renting preferred method
Around 10 per cent said they had generated income by renting out an investment property, while five per cent rented a room to a lodger or through a rental site such as Airbnb.
A further five per cent generated income by remortgaging, five per cent did so via equity release and five per cent generated income by refurbishing and selling a property.
More common in cities
The research showed residents in urban areas are almost twice as likely to have generated income from property than those living in suburban or rural locations with 41 per cent of urban dwellers saying they had done so compared to 18 per cent of those in the suburbs and 16 per cent of those in rural areas.
In particular, city dwellers were more than three times as likely to have provided lodgings with 11 per cent citing so, compared with three per cent in suburban locations and one per cent in rural areas.
Variances in age and gender
There was also an age split with 44 per cent of under 55s having generated income through a property compared to 13 per cent of over 55s.
Men are more likely to have generated income from property with 29 per cent saying they had done so in comparison to 20 per cent of women.
The most common reasons people gave for using property to generate income was to supplement their regular income and for home renovations at 21 per cent.
Additionally, 17 per cent said they were preparing for retirement, 17 per cent used the income to give to children, 16 per cent put it towards a major one-off purchase and 15 per cent paid off a mortgage.
Among those who said they had not used property to generate an income, 45 per cent said they did not need the income, 25 per cent said they did not want the hassle of managing it, 17 per cent said they did not feel comfortable investing in property, 12 per cent said they did not know how to go about it, and nine per cent were worried about the tax implications.
Stephen Lowe, group communications director at Just Group, said the firm’s figures showed that people with higher financial confidence were more likely to own a property, and to have used it to generate an income.
He added: “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.”