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Most Landlords are Struggling to Make Ends Meet

Man with empty pockets

Research carried out by the National Landlords Association (NLA) has found that 79% of landlords are making so little money from their property rental businesses that they can only afford to pay the interest on their mortgages, not the loan capital.

“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,” says Richard Lambert from the NLA.

This finding has prompted the NLA to look at the argument that the only significant cost landlords have to worry about is their mortgage.  This has created a sense of righteous indignation among tenants struggling to get on the housing ladder. They feel it is unfair that they have to fork out for rent each month because they can’t afford to buy a home, while their hard-earned cash is paying off someone else’s mortgage.

The Housing Market is in Crisis

The reality is, of course, very different, despite the constant Landlord Vs. Tenant narrative portrayed in the media.

“Housing is expensive for everyone at present,” says Richard Lambert.  “The Government needs to encourage the supply of housing in all tenures, including the private rented sector.”

The housing sector is in crisis. There is not enough affordable housing to meet demand after large swathes of social housing were sold off in the 80’s and 90’s. Private landlords plug the gaps in many communities, yet they are frequently vilified in the press.

The Government Needs to Reconsider its Landlord Tax Policies

The government has done its best to make life difficult for landlords, in a misguided attempt to level the playing field and make it easier for buyers to get on the housing ladder. Unfortunately, new landlord tax charges and a lack of investment in affordable housing has created a perfect storm. Beleaguered landlords are being forced to reconsider their buy to let businesses and tenants are having to pay higher rents due to a shortage of available housing in the private rental sector (PRS).

The NLA is calling on the government to stop imposing tax clampdowns. If decent landlords are forced out of the PRS, it drives up the cost for tenants and opens the door to rogue landlords who keep their costs low by investing nothing in their houses.

Are you finding it hard to make money as a landlord? Tells us about it in the comments.

Read more about landlord finance:

A New Way Finance Solution for Landlords

The UK is the Worst EU Country for Landlords

NLA Says Property Market Will Be Flooded as Landlords Sell Up

controlled landlord

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