London landlords face average costs of £6,535 per property per year excluding mortgage costs and tax or 32% in rental income. This is twice the national average cost for a landlord of £3,632 per year which equates to 34% of incoming rent due to rents being lower than London rent prices.
South East landlords have the second highest running costs. They spend an average of £3,691 or 37% of rental income. This is followed by the East with costs of £3,212 or 35% of their income.
The cheapest region is the North East where the average cost is £1,895 per property per year or 34% of their rental income. Wales has the second lowest average cost of £2,211. However, in an area with lower rents, costs can raise up to 41% of a Welsh landlord’s rental income.
Higher costs aren’t the only problem for landlords. They also face the rising tax burdens following the Stamp Duty changes introduced last year and Mortgage Tax Relief changes introduced in April. Due to these changes, one in five landlords is now looking for ways to cut costs particularly on letting agent fees, property maintenance, and mortgage costs.
Even though taxes may seem to be a simple way to tackle the UK’s housing crisis, this will impact businesses that support the property industry as landlords will apply cost cutting measures and will be forced to raise their rent to cover the costs of rising taxes.