You are here: Home - Household Bills - News -

One third of landlords plan to cut annual spending

0
Written by: Antonia Di Lorenzo
08/03/2019
More than a third of landlords are looking to cut spending levels as a result of rising costs and higher taxes.

The latest research from Kent Reliance found the average landlord now spends £3,571 per property in annual running costs before tax or mortgage interest. This equates to 32.9% of rental income, represeting a 5.6% rise over the past two years.

Around £1,086 is currently spent on maintenance, repairs and servicing, while £935 goes towards letting agent fees.

A typical landlord spends £426 per property each year in ground rents and service charges. Insurance typically costs £149, and legal and accountancy fees £107, while administrative and license fees add another £64 per year.

The research also revealed that a further £528 is lost in void periods each year, a figure that has climbed in recent years as a result of higher rents, and a slightly longer gaps between tenancies.

Slashing costs

The report found that a typical landlord is reviewing their outlay and is looking to cut spending per property by around 6%. If replicated across the private rental sector, this would reduce their total spending by close to £1bn each year.

Property upkeep and maintenance, and property improvement were the two most popular areas identified by landlords for potential cost-cutting, standing at 46% and 38% respectively. Around 29% hope to cut their outlay on mortgage interest payments.

Meanwhile, one in five landlords plan to increase rents to cover the higher costs they face.

Adrian Moloney, sales director of Kent Reliance’s parent OneSavings Bank, said the political discourse surrounding the private rented sector has been one-sided.

“Overlooked is the significant economic contribution landlords make, supporting thousands of jobs through their spending and housing a large portion of the country’s workforce. Instead, landlords have faced punitive tax and regulatory changes, at a time when running costs are climbing.

“Policies that increase the cost and complexity of being a landlord don’t benefit tenants; quite the opposite. Property investors will seek to protect their business’s margins, whether cutting their spending on elements like property maintenance and improvement, or raising rents.”

He added that the recent reforms are also deterring landloards from making new investments, which is not helping the housing market’s chronic undersupply of property.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week