The rental income received by 79% of landlords with mortgages is only sufficient to service the interest element of their loans, and not pay down their debts, as they contend with rising costs, according to new research.
The data, unearthed by the National Landlords Association (NLA), has prompted the association to examine the narrative that tenants are just paying off their landlord’s mortgage.
In a discussion paper launched in London this week, the NLA and PricedOut, the campaign for affordable housing, looked at both sides of the argument.
The NLA holds that there are many costs to running a successful lettings business that tenants are either unaware of or do not consider in this debate.
Richard Lambert, CEO of the NLA, said: “There are myriad costs to running a letting business, including maintenance, repairs and upgrades, licensing, and insurance. Rents have to cover all these costs, as well as the interest on a mortgage, where there is one.
“Housing is expensive for everyone at present. The government needs to encourage the supply of housing in all tenures, including the private rented sector.”
The NLA, in the discussion paper, recommends that the government allows more time for existing policies to bed in (five years), and evaluate their effectiveness, before new policies and regulations are made.
Encourage building more housing of all tenures by simplifying planning and borrowing rules.
Stop taxing professional landlords out of the market. The loss of good landlords will not make renting more affordable; it will simply drive up the cost for those who want to access decent rented homes.
For more information or to view the discussion paper, click here.