Maintenance, insurance, professional service fees and other running costs can amount to over £8,000 every year in inner London – and that’s not including the mortgage!
Mark Long, director for BDRC Continental, said: “There are a lot of costs associated with being a private landlord, not least maintenance, insurance and professional advice from accountants and solicitors.”
BDRC Continental’s Landlords’ Panel reveals that just under one quarter (23%), of private landlords letting out property in inner London spent over £5,000 on maintenance in the last 12 months.
Insurance was the next highest cost with 14% of landlords spending £2,000 or more, and 10% spending the same amount on accountancy fees. Some 11% spent between £1,001 and £2000 on estate agency fees with 12% paying £2,000 or more.
The figures aren’t much lower in outer London. Again almost one quarter (24%) of private landlords spent over £5,000 on maintenance, 11% spent £2,000 or more on estate agents, and 5% spent the same amount on accountants. Although spend on insurance is lower, out-goings on estate agents for letting fees are higher.
Looking at the average cost for all fees in the inner London area, a private landlord could be spending up to £8,071 per year to let their property.
In outer London the fee is £201 lower at £7,870. Despite these costs, almost half (48%) of landlords in central London and more than a third (36%) in outer London make a full time profitable living from letting, compared to the UK average of 34%.
Long added: “However our survey tells us that the market for private rental across London is strong and landlords feel positive about their prospects, so despite the costs, the market for letting property in the capital in London remains buoyant and profitable.”