London is the most expensive part of the UK within which to be a landlord, according to new research from specialist lender Kent Reliance.
The average cost for a landlord in the capital, excluding any mortgage and tax and including void periods, is £6,535 a year. This equates to 32 per cent of rental income. However, the higher rents in London offset this. Nationwide, the average cost for landlords comes in at £3,632. This amounts to a considerable 34 per cent of rental income, meaning that despite being costly, the capital offers good value for landlords.
The South East came in second place, with landlords spending an average of £3,691 or 37 per cent of rental income. Meanwhile, in the East of England it is £3,212, equating to 35 per cent.
The North East was found to be the least expensive location to be a landlord, with costs at an average of £1,895 per property per year. However, the regions lower rents mean that this still amounts to 34 per cent of their rental income, exceeding London’s ratio.
Wales offered the second lowest costs, with landlords spending an average £2,211. However, once again, low rents mean that this amounts to around 41 per cent of a landlords’ rental income.
Of the local authorities, landlords have the lowest running costs in Blaenau Gwent, Wales, at an average of £1,495, whilst all 19 local authorities with the highest average costs are in London.
Sales and marketing director at OneSavings Bank, John Eastgate, warned of potential negative effects that the cost of rising tax burdens could have on landlords. He said: ‘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. 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.’