Buy-to-let contributes £16bn to UK economy

 In Property

Buy-to-let landlords contribute £15.9bn pa to the UK economy, according to a new study from Kent Reliance.

This indicates how important the industry is for generating taxes and jobs. However, recent legislative changes have caused many landlords to tighten their belt buckles.

Let’s take a look at what this might mean for the future of the UK economy:

How does buy-to-let contribute to the UK economy?

On average, buy-to-let landlords spend £3,632 each year on property maintenance (before tax and mortgage interest).

Average annual running costs include:

  • Maintenance and repairs: £1,025
  • Letting agent fees: £870
  • Service charges and ground rents: £374
  • Insurance: £181
  • Legal and accountancy fees: £121
  • Licenses and administrative fees: £41
  • Lost revenue in-between tenants: £652

The total is equivalent to roughly one-third of rental income, and is paid to a broad range of tradespeople and companies.

Why are landlords now cutting costs?

The Kent Reliance research established that 36% of landlords were now considering cost-cutting exercises. 5% said they may even increase rental rates to cover the additional tax burden.

This is due to recent government legislation, which has resulted in:

Landlords cited maintenance and upkeep (17%), letting agent costs (10%) and mortgage costs (10%) as those most likely to be cut.

In turbulent times like these, it’s more important than ever to keep a tight rein on your buy-to-let finances.

Call on 3 Wise Bears for more expert buy-to-let accountancy insight.

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