My preferred method of achieving chunky levels of passive income is to invest in UK shares. And by investing in the right ones, I believe it’s possible to start generating cash relatively quickly. Here’s how…
A steady income stream
Many of the UK’s largest listed companies pay dividends twice a year, with a few making quarterly payments. However, it’s important to get the timing right.
For example, on 24 July, British Land (LSE:BLND) — the FTSE 100 owner of a £10.1bn property portfolio — is due to pay its final dividend (10.8p) in respect of its March 2026 financial year. But that doesn’t mean anyone buying the group’s shares today (11 July) will receive this payment. It will only be paid to those who owned shares in the company before 18 June, otherwise known as the ex-dividend date.
Although there are no guarantees when it comes to dividends, history can be a good guide to predicting the future. Indeed, looking back five years, the group’s track record suggests that anyone holding shares in this December and June 2027, will receive a dividend in January and July 2027 respectively.
But how much?
Using the past to see into the future
Over the past five years, the group’s grown its dividend modestly. From 2022-2026, its annual growth rate has averaged 1.34%.
| Financial year (31 March) | Interim dividend (pence) | Final dividend (pence) | Total dividend (pence) |
|---|---|---|---|
| 2026 | 12.32 | 10.80 | 23.12 |
| 2025 | 12.24 | 10.56 | 22.80 |
| 2024 | 12.16 | 10.64 | 22.80 |
| 2023 | 11.60 | 11.04 | 22.64 |
| 2022 | 10.32 | 11.60 | 21.92 |
But if analysts are correct, the pace of increase is likely to pick-up over the next three years. They’re forecasting dividends of:
- March 2027 – 24.5p
- March 2028 – 25.9p
- March 2029 – 27.0p
A payout of 24.5p would give £585 of dividend income for every £1,000 invested. That’s an impressive yield of 5.85%. Looking ahead to 2029, it’s offering a potential return of 6.44%.
But British Land isn’t the only high-yielding stock out there. There are 14 on the FTSE 100 currently offering a return of 5% or more.
On the FTSE 250, 54 companies are paying 5%+. The average of these is 7.17%. It means a £10,000 portfolio could produce income of £717 over the next 12 months.
My view
On reflection, I think British Land could be a high-quality dividend stock to consider. It has an impressive portfolio of campuses (“high-quality, amenity-rich environments” — offices to you and me), retail parks, and a small-but-growing urban logistics platform in London.
Of course, as with any business, there are risks. The group’s relatively large debt means it’s vulnerable to a higher interest rate environment. And the commercial property sector can be volatile. Bad debts could be an issue if the economy takes a nosedive.
However, for the time being at least, I think the group’s in good financial shape. For its March 2026 financial year (FY26), the group reported a 6% increase in like-for-like (LFL) net rental growth. Its retail business has a 99% occupancy rate, and its portfolio-wide loan-to-value of 39.2% gives plenty of headroom.
Its emphasis on warehouse space in central London seems sensible to me given demand is at a premium here. And appeal from the AI sector saw it achieve a 12% LFL net rental growth for its campuses in FY26.
For these reasons, I think the group should be able to grow its dividend in line with the forecasts. That’s why the stock’s on my watchlist when I’m next in a position to invest.
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James Beard does not hold any positions in the companies mentioned.
