Landlords spend on average over £3,000 on their properties
Landlords in the UK are spending nearly £4.7 billion a year on their rental properties, an average of £3,134 each, according to new research.
For many the cost and time involved in manging their properties is becoming too much and some 600,000 are considering leaving the private rented sector, says the report from LV= General Insurance.
That means that 41% of landlords could sell up as they are fed up with a harsher tax regime and what they regards as too many regulatory changes in recent months and years, it points out.
The research found that the average landlord spends £360 on renovations and refurbishments, £370 on replacing or repairing the boiler, £313 fixing structural damage, £265 on decorating and £203 on garden maintenance.
In terms of dealing with damage, 66% said the carpets in their property are most likely to be damaged by tenants, 45% said walls, 27% white goods and 24% doors. They spend £322 replacing or repairing flooring, £298 on white goods, £178 cleaning at the end of a tenancy and £149 removing items that have been left behind.
These accidental damage costs may be covered by landlord insurance, however the research found that 13% of landlords currently don’t have the right insurance in place, which puts them at risk of losing out on up to £3,000 a year.
Across the UK, the costs of being a landlord vary between regions. The area which has spent the most money on repairing damage made by tenants is the South West, spending an average of £3,461 on repairs. Whereas landlords in the North West on average spend the least on repairing damage at £2,738.
Damage to a property and subsequent repairs can impact on the relationship between landlord and tenant and 34% of landlords admit that bad tenants are the most challenging aspect of the job.
Although 46% have never experienced a tenant dispute, 23% says they have disputes at least once a year, with 6% having them at least once a month. The most common causes for tenant disputes are delayed rent at 43%, damage to property at 41%, cleanliness issues at 33%, disputes over bills or deposits at 10%, pets 9% and sub-letting 7%.
‘Being a landlord is not without its challenges and it’s clear that many are feeling the strain due to tax and regulatory changes facing the industry. Finding the right tenant is crucial. Although the majority rarely experience tenant disputes, it’s clear that, when they do, the disputes are challenging and potentially costly,’ said Heather Smith, managing director of the LV= GI Direct business.
‘Our research found that 13% currently don’t have landlord insurance, meaning they are missing out on things such as cover for accidental damage by tenants, loss of rent if the property becomes uninhabitable, and contents cover. Having insurance not only protects landlords from being left out of pocket, but it also provides peace of mind and helps eliminate some of the stress that can come from managing a property,’ she added.
Meera Chindooroy, policy and public affairs manager at the National Landlords Association (NLA), said there are no signs that the Government intends to pursue a more helpful approach to private rented sector landlords.
‘Over recent years, landlords have faced a raft of haphazardly introduced new regulations which, compounded by tax changes, have increased the cost of letting. The Government’s proposal to abolish Section 21 will intensify the impact that rent arrears and damage to property has on landlords’ ability to run their businesses successfully,’ she explained.
‘On top of the costs which can be covered by specialist insurance, landlords will need to spend more time and money to regain possession of their properties. Seeking information, support and advice, for example through landlords’ associations, can be invaluable in reducing your risks,’ she added.