Landlords contribute billions to the UK economy per year, according to new report
Buy to let landlords are currently contributing £15.9 billion per year to the British economy through pre-tax spending on their portfolios, according to new research.
Due to the rapid growth of the buy to let sector and increasing property prices, this figure is more than double the estimated £7.1 billion in 2007.
36% of landlords are aiming to cut their annual spending as tax costs increase, revealed a survey by BDRC Continental on behalf of Kent Reliance.
This would reduce overall spending by more than £500 million in total and this is most likely expected to affect tradesmen and professionals that support the buy to let industry.
17% of landlords said that property upkeep and maintenance was an area for potential cost cutting followed by 10% identifying letting agent fees and mortgage costs.
Landlords anticipate reducing spending on letting agent fees by 28%, property maintenance and servicing by 21% and mortgage costs by 15%.
Overall, landlords spend £2 billion in service charges and ground rent, £963 million on insurance, £904 million on utilities and £1.1 billion on other associated costs of letting a property, according to the Tracking Landlords’ Costs and Economic Contributions report.
The report goes on to reveal that spending per property is currently £3,632 before tax or mortgage interest which is a third of rental income.
Landlords provide £5.5 billion in revenues to particular sectors with £4.7 billion spent on letting agents’ fees each year, £644 million on legal and accountancy fees and £218 million on administration costs.
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John Eastgate, sales and marketing director of OneSavings Bank, commented: “Landlords may seem like an easy target for political point scoring, but they play a vital role in the economy. Not only do they house a huge proportion of the country’s workforce, bridging the housing demand and supply gap, their spending supports thousands of jobs – whether builders, cleaners, lawyers and accountants or letting agents.
“Trying to tackle the housing crisis by targeting landlords with punitive taxes is very simple and politically highly palatable, but has unintended consequences. Either it means less work for all those who support the property industry, or it means tenants will have to foot the bill for the government’s tax raid, or both.”
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