Running costs account for 40% of the average landlords’ rental income, according to the latest research, a figure that has risen 5.6% in the past two years.
The research from Kent Reliance found landlords spend £3,571 per property in annual running costs, before tax or mortgage interest, equivalent to 32.9% of rental income. Costs have leapt by 28% since 2009, the equivalent of a rise of £771 per property.
Of this average figure, around £1,086 is spent on maintenance, repairs and servicing, while letting agents’ fees account for £935 per property.
An additional £426 per property each year is given over to ground rents and service charges with insurance typically costing £149.
Legal and accountancy fees cost the average landlord £107 annually, while administrative and license fees add another £64 per year.
A further £528 is lost in void periods annually the research found, a figure that has climbed in recent years due to higher rents and longer gaps between tenancies.
As a result of these rising expenditures, landlords were looking to review their costs and cut their per property spend by six per cent, the report found, with property upkeep and maintenance earmarked by many as areas where they could cut spend.
One in five landlords said they plan to increase rents to cover rising running costs and higher taxes.
The report found landlords contribute a total of £16.1 billion to the British economy through their spending, supporting thousands of jobs in the industry, from builders and tradesmen to accountants and letting agents. Their contribution has nearly doubled from £8.5 billion a decade ago thanks to the expansion of the rented sector and rising costs of keeping a property.