New research has revealed that vacant properties, tenant arrears and unexpected maintenance charges are just a few of the many things that are costing small UK landlords* £2.1 billion a year** , with the average landlord paying out over £1,500 a year in ad-hoc costs.
The study, undertaken by Northwood, one of the leading providers of Guaranteed Rent, reveals that 84% of landlords receive less money than they thought from their monthly rental income due to unexpected costs, such as tenant arrears and having to take time away from their core employment to deal with tenants and the property.
A property being vacant is something that particularly impacts landlords financially, with almost half revealing that they did not receive any rental income on their property for up to three months due to vacant periods, and one in ten suffering for six months or more without tenants in their property.
The study, the first and largest of its kind in the private sector, also highlighted that over half of tenants are late with their rental payments and 59% of landlords have to chase tenants for payment at some point in the last year. This is something that creates real apprehension for UK landlords, with 91% admitting they are concerned about tenant arrears over the next two years.
Whilst there is clearly a large financial implication on being a landlord, there are also more personal effects, with 82% of landlords having experienced inconveniences such as missing a personal event or having to cut back on social activities due to being a landlord. And one in five landlords saying they have been called out to their property four to five times a year.
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.
“Some people become landlords due to changes in personal circumstances, the need to relocate or because of the current housing market. The research shows that being a landlord can be like having a second job that is why we have a Guaranteed Rent Service to ensure our landlords get paid, no matter what.”
The Northwood Guaranteed Rent Service gives landlords the certainty of a fixed rental income even if the property is vacant or the tenant stops paying.
**Calculated by average cost a landlord spends a year [£1532] multiplied by 1.4million landlords in the UK
[according to the National Landlord Association]