Nearly a third of landlords and property investors are planning to lower their mortgage payments according to a report tracking buy-to-let costs.
Data from Kent Reliance shows nearly a third (29%) of landlords are planning to reduce their mortgage payments by an average of 23%.
Faced with higher running costs, and larger tax bills, many landlords are planning to either raise rents to cover greater expenditure or to reduce their spending. The report says this cost-cutting could have knock-on impacts for tenants – either a higher cost of accommodation or potentially reduced standard of accommodation.
Aaron Strutt, product director at Trinity Financial, says: "Many landlords are trying to reduce their bills and with so much competition in the buy-to-let mortgage market it is an excellent time to find out it is possible to refinance onto a better deal."
The pre-tax cost of running a rental property has increased in recent years. Excluding mortgage costs, landlords now spend £3,571 per year, up 5.6% from £3,382 two years ago. This represents 33% of a landlord’s gross rental income, slightly up from 32% in 2017 as costs have risen slightly faster than rents. Over the past decade, average pre-tax costs per year have risen by £771, up 28%.
The survey estimates that landlords collectively contribute £16.1bn to the British economy through spending – up from £8.5bn a decade ago.
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Source: The research was conducted by Teamspirit for Kent Reliance asked 494 property investors in (January 2019) and 657 property investors (January 2017).