Landlords in the UK are spending nearly £4.7 billion a year on their rental properties (an average of £3,134 each), according to new research from LV=General Insurance (LV=GI).

The time and cost involved in managing properties has become so great that over 600,000 (41%) landlords are considering selling up.

Cost of being a landlord

Data from LV=Gl revealed the average landlord spends over £3,000 a year on general maintenance. Costs include: renovations and refurbishments (£370), replacing/repairing (£370), fixing structural damage (£313), decorating (£265) and garden maintenance (£203).

When citing which factors of their rental property would be damaged by tenants, carpets (66%), walls (45%), white goods (27%) and doors (24%) appeared high on the list. As such, landlords spend the most money replacing/repairing flooring (£322), white goods (£298), other items (£256), cleaning at the end of a tenancy (£178) and removing forgotten items (£149).

While these accidental damage costs may be covered by landlord insurance, the research found that one in eight (13%) currently don’t have the right insurance in place, which puts them at risk of losing out on up to £3,000 a year.

Regional costs

Across the UK, the costs of being a landlord vary between regions. The South West saw the most money spent on repairing damage made by tenants (£3,461), whereas landlords in the North West spend the least on repairing damage (£2,738).

Tenant disputes

A third (34%) of landlords admitted that bad tenants are the most challenging aspect of the job. Although 46% have never experienced a tenant dispute, almost a quarter (23%) have disputes at least once a year, with 6% least once a month.

The most common causes for tenant disputes are delayed rent (43%), damage to property (41%), cleanliness (33%), disputes over bills or deposits (10%), pets (9%) and sub-letting (7%).

Heather Smith, managing director of LV=GI Direct, said: “Finding the right tenant is crucial. Although the majority rarely experience tenant disputes, it’s clear that, when they do, the disputes are challenging and potentially costly.”

“Our research found that 13% currently don’t have landlord insurance, meaning they are missing out on things such as cover for accidental damage by tenants, loss of rent if the property becomes uninhabitable, and contents cover.”

Meera Chindooroy, policy and public affairs manager at the National Landlords Association (NLA), added: “Over recent years, landlords have faced a raft of haphazardly introduced new regulations which, compounded by tax changes, have increased the cost of letting. We have not seen any signs yet that the Government intends to pursue a more strategic approach to help landlord’s future-proof themselves.”

She said the government’s proposal to abolish Section 21 will boost the impact that rent arrears and damage to property has on landlords’ ability to run their business successfully. On top of the costs, landlords will need to spend more time and money to regain possession of their properties.

“Seeking information, support and advice, for example through landlords’ associations, can be invaluable in reducing your risks,” Chindooroy concluded.