London has now been named as the most expensive part of the UK to be a landlord whilst England’s North East has been located as the cheapest area, a new research found.
Specialist lender Kent Reliance put the research together and found out that the average landlord in London pays £6,535 a year, or 32% in rental income. This number excludes any mortgage and tax but includes any void periods.
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Nationally, the average cost for a landlord sits at £3,632 per year, which is still a fairly big chunk of their income as it equates with 34% of incoming rent, due to average rents being lower than in the capital.
In the South East, landlord costs average at £3,691 or 37% of their rental income and in England’s East costs sit at £3,212 or 35%.
In the North East the average cost for a landlord every year amounts to £1,895, which is still 34% of their rental income.
Furthermore, the report also suggests that landlords might be looking into ways to cut costs, especially after increasing tax burdens due to stamp duty changes and mortgage tax relief changes. Most landlords said they were looking at letting agent fees, property maintenance and mortgage costs to reduce costs whilst one in five also admitted they are thinking about raising rents to balance some of the costs.
According to John Eastgate from OneSavings Bank, landlords play a central role in supporting today’s housing market as one in five households live in rental accommodation.
“While taxes may seem to be a simple way to tackle the UK’s housing crisis, they will have a ripple effect, and will impact businesses who support the property industry as landlords apply cost cutting measures, or cause rents to rise as tenants cover the cost of rising taxes, or even both,” he said.
“Another effect that will emerge is a rise in professionalisation of the sector as amateur and accidental landlords leave the market, leaving fewer, bigger landlords. But this alone will not solve the nation’s housing crisis.”
