As the government’s letting fees ban looms, agents face a second squeeze as landlords rein in spending on their properties as their tax bills rise, research has revealed.
Landlords spend £3,632 on each of the properties on average every year or a third of the average rental income, according to Kent Reliance Building Society.
Of this, £1,025 is spent on maintenance, repairs and servicing, with £870 spent on letting agent fees.
But this spending is likely to reduce by nearly 7% this year as ever-rising tax burden on landlords force 36% of them to consider cutting costs, the building society’s research reveals.
Letting agent fees
It also pinpoints letting agent fees, property maintenance and mortgage costs as the targets for cost cutting by landlords.
Kent Reliance reckons landlords currently contribute £15.9bn to the UK economy, a figure that has doubled since 2007. But the lender says that £500m less will be spent each year as landlord rein in their property budgets.
Landlords currently spend £5.5bn on property maintenance and upkeep, £2bn on service charges and ground rent, £963m on insurance, £904m on utilities and £1.1bn on miscellaneous costs.
Spending on letting fees totals £4.7bn a year and £644m on legal and accountancy fees plus £218m on administration costs.
“Landlords may seem like an easy target for political point scoring, but they play a vital role in the economy,” says John Eastgate of OneSavings Bank, parent company to Kent Reliance (pictured, left)
“Not only do they house a huge proportion of the country’s workforce, bridging the housing demand and supply gap, their spending supports thousands of jobs – whether builders, cleaners, lawyers and accountants or letting agents.”