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Over a quarter of landlords income goes on mortgages
New figures from a landlords’ organisation show that mortgage repayments are easily the biggest outgoing for a large proportion of landlords.
The research from the National Landlords’ Association reveals two thirds of landlords have mortgages on their lettings portfolio, and that those with a BTL mortgage spend 28 per cent of their rental income on meeting repayments.
Landlords surveyed also said they spend on average 11 per cent on maintenance, and six per cent on each of agents’ fees, furnishing and insurance.
“These figures show how significant a business cost mortgage repayments present for the average landlord and demonstrate why the Chancellor’s Budget will be such a blow for many” says NLA spokeswoman Carolyn Uphill.
Last month George Osborne announced that tax relief mortgage interest payments and arrangement fees incurred when taking out buy to let mortgages would be restricted to the basic rate of income tax, currently 20 per cent – even if the individual landlord was liable for the payment of higher levels of income tax.
The measure will be phased in from April 2017.
“With the average rental yield at its lowest level for five years – at 5.7 per cent – landlords need to plan their finances carefully to ensure they do not end up running at a loss” she says.
