Tuesday, 13 November 2012
UK landlords lose out on £2.1bn a year
Landlords pay an average of £1,500 a year out of their buy-to-let pockets, Northwood found. The Guaranteed Rent provider's survey showed that 84 per cent receive less money than they thought from their monthly rental income due to unexpected costs.
Indeed, vacant properties are the biggest financial problem facing landlords, with half of them saying that they do not receive income for up to three months a year. Northwood's study also highlighted that over half of tenants are late with their rental payments, leading 91 per cent of landlords to be concerned about arrears over the next two years.
Managing Director of Northwood, Nick Cooper, comments, "Landlords have recently been under fire with accusations that tenants are victims to greedy landlords, but this research highlights that landlords too face a number of difficulties. The amount of money being paid out for unexpected costs each year is staggering, and with tenant arrears and vacant properties a very real concern, landlords can be hit hard."
But while Northwood's study shows that landlords are losing out, other reports show that landlords are very comfortable with their income. 61 per cent plan to live off their rental income alone when they retire, according to the National Landlords Association.
No wonder, as rents continue to hit new records in the UK. According to LSL Property Services, rates are now at a high of £741 per month. And if Savills' new forecast comes true, those numbers will climb even higher: average rents in the UK will rise by 2.5 per cent in 2013, predicts the firm, ultimately increasing by 18.2 per cent by 2017.
Those really looking to lose out, then, are the under-35s, with the amount of rent paid by the age group predicted to soar by 53 per cent from £24 billion to £37 period over the next five years.
"Every pound monthly rents go up, there's another pound renters cannot save for a deposit for their first home," comments LSL director David Newnes. "This is lengthening their stay in rented accommodation and increasing competition in the private sector."
Greater London landlords will be the biggest beneficiary, says Savills, with rentysomethings just outside the capital set to pay 3 per cent more in rent next year - ahead of the national average - and 26.4 per cent more by the end of 2017, far outstripping that of even prime central London.
"Recent population trends suggest that demand will continue to increase in coming years," says Yolande Barnes, director of Savills world research. "Current levels of occupier demand make the private rented sector the only truly fully functioning market in the UK residential sector. Yields and income in London remain strong by world city standards and make the capital an attractive buy in a global context."
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