In the UK, landlords are shelling out almost £4.7 billion annually on their rental properties - that is an average spend of £3,134 each.
The growing cost and the time spent in managing these properties are driving some 600,000 (41%) freeholders to contemplate leaving the private rental sector and sell up, according to a research conducted by LV=General Insurance.
On average, a landlord would spend £360 on renovations and refurbishments, £370 on boiler repair or replacement, £313 to fix structural damage, £265 for decorating and £203 for garden maintenance.
Some two-thirds of property owners claim that carpets are the most likely to be damaged by tenants, followed by walls, white goods and doors.
Most of the money that landlords spend would go to the repair or replacement of the flooring - £322, white goods - £298, or other items - £256, cleaning at the end of a tenancy - £178 and removing things left behind by tenants - £149.
Although such damages could be covered by landlord insurance, LV=GI found out that 13% of the property owners do not have the correct coverage. Under such conditions, these landlords stand to lose £3,000 a year.
Landlord expenditures vary depending on the regions though. For example, a property owner in the South West would spend £3,461 repairing damages, whereas landlords in the North West would be spending only £2,738, almost a difference of £1,000.
Damages incurred to the property and the ensuing restoration can affect the relationship between a property owner and a tenant. 34% of landlords claim that having bad tenants is the most challenging part of the business. And despite the fact that 46% of the responding landlords have never encountered disputes with their tenants, 23% are subjected to disputes at least once a year and some 6% at least once a month.
The most common disputes would be: delayed rent 43%, damage to property 41%, cleanliness 33%, bills or deposits 10%, pets 9%, and issues on tenants subletting the property 7%.
From Heather Smith, managing director of LV=GI Direct:
“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.”
Meera Chindooroy, policy and public affairs manager at the National Landlords Association (NLA) also had these to say:
“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…
Seeking information, support and advice, for example through landlords’ associations, can be invaluable in reducing your risks...” Chindooroy concluded