A quarter of landlords would look to cut out letting agents to reduce the ever-rising taxes and running costs of their buy-to-let portfolio, new research claims.
A survey by Kent Reliance found that the average landlord now spends £3,571 per property on annual running costs, before tax or mortgage interest.
Landlords spent most on property maintenance at £1,086, followed by letting agents’ fees at £935.
Landlords said they would review all their costs, with some hoping to achieve savings of 30%.
The report warns that lettings charges could increase further once the tenant fee ban is introduced in June, adding that this may result in landlords either shopping around or self-managing.
It says: “Rather than see revenues fall, many letting agents may pass the costs on to landlords, who in turn will seek to recover their higher outlay from tenants in the form of higher rents where demand allows.
“It’s unlikely to make renting more affordable, simply turning an upfront cost into a higher ongoing monthly cost for many tenants.”
Almost half (46%) of landlords said they would reduce the amount they spend on property upkeep and maintenance to manage their costs, while one in five said they planned to increase rents.
Cumulatively across the private rental sector, landlords contribute a total of £16.1bn to the British economy through their spending, supporting thousands of jobs from builders and tradesmen through to accountants and letting agents, according to the report.
Adrian Moloney, sales director of Kent Reliance parent company OneSavings Bank, said: “Policies that increase the cost and complexity of being a landlord don’t benefit tenants – quite the opposite.
“Property investors will seek to protect their business’s margins, whether cutting their spending on elements like property maintenance and improvement, or raising rents.
“The recent reforms are also deterring new investment, especially from amateur landlords. This does little to tackle the housing market’s chronic undersupply of property.
“Further intervention could prove counterproductive with many landlords still coming to terms with change.
“A heavy-handed version of rent control that prevents them from absorbing rising costs, for instance, could prove to be a tipping point leading to a dwindling supply of rental homes. However, there is a real opportunity to align longer-term tenancies to fixed-term mortgage products.
“This would not only provide stability within the sector but provide a platform for the private rental sector and the government to work together to create a more positive outcome in the social housing debate.”