Rising Costs Lead Landlords To Cut Spending
Higher taxes and rising running costs have led to 36% of landlords reducing their expenditure, research reveals.
The data has been published by Kent Reliance, a specialist mortgage lender, who say that the average spend every year in running costs is £3,571 per property.
That is before mortgage interest or tax which is the equivalent of 33% of the average rental income.
In addition, over the last two years, landlord costs have grown by 5.6% without the factoring in of increasing taxes and since 2009 landlord costs have risen by 28%.
A landlord is currently spending £1,086 in maintenance, servicing and repairs with £935 on letting agent fees.
Average landlord is spending £426 in service charges
The average landlord is also spending £426 in service charges and ground rents for each property they own.
The fees include licenses of £64 per year, legal and accountancy fees of £107 and insurance of £149.
Landlords also have to cater for void periods every year of around £528, a figure that is growing year-on-year.
A spokesman for the firm said landlords have faced regulatory changes and punitive taxes when their running costs are increasing.
He added: "Policies that increase those costs and the complexity of being a landlord do not help tenants.
"Property investors will always seek to protect their business margins, whether that's reducing their spend on property improvement and maintenance or increasing rents."
He added that recent reforms are also acting as a deterrent to new investment, particularly from amateur landlords.
The data from Kent Reliance also highlight that landlords in the UK's private rental sector contribute around £16.1 billion to the economy through spending and supporting thousands of jobs from tradesmen to builders as well as letting agents and accountants. That's double the figure from 10 years ago of £8.5 billion.
Tax breaks for landlords would reduce empty home numbers
Meanwhile, the Residential Landlords' Association (RLA) says that the government should introduce tax breaks for landlords in a bid to address the increasing number of empty homes.
Official figures reveal that in the year to October 2018, the number of England's empty homes rose to more than 634,000, a rise of 30,000.
Now the RLA says the government should scrap the additional stamp duty levy when buying new homes for rent for when a landlord invests in a long-term empty property and then, within a reasonable period of time, brings it back into use.