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Cost of maintaining a buy-to-let hits £12k a year in parts of the UK

Leading property management platform, Howsy, has looked at the cost of maintaining a buy-to-let property each year and how this varies across the UK.

Buy-to-let can be a tricky business if you don’t tackle it properly and there are a whole host of costs that can trip up the amateur investor. From the more obvious additional three percent stamp duty tax, to various other tax implications, void periods, mortgage costs, agency fees, the cost of finding a tenant, and more, Howsy’s previous research shows the average buy-to-let brings an annual return of just £2,000.

With the Government’s continued attack on UK landlords, making the most out of your investment financially can be tough and even when you consider all financial commitments for a property, many can still be caught unaware by out of the blue maintenance and repair costs.

Buy-to-let landlords should squirrel away savings in anticipation of these events and an industry rule of thumb is an annual budget equivalent to 1% of your property’s value.

So what does that equate to?

Across the UK landlords should be tucking away an annual budget of £2,344 to cover repairs and maintenance, with this rising to £4,746 in London, with the North East home to the lowest repair costs at just £1,328.

Of course, markets with higher rent returns may seem promising from an investment standpoint but the higher the reward, the higher the cost when things do go wrong. In Kensington and Chelsea, this annual 1% saving climbs to an eye-watering £12,292, hitting nearly £9,000 in both the Cities of London and Westminster.

Outside of London, South Bucks and Elmbridge are home to the most expensive buy-to-let maintenance costs at £6,091 and £6,019 respectively.

Head to the likes of Burnley or Blaenau Gwent however, and this yearly maintenance budget drops to less than £1,000 a year.

Founder and CEO of Howsy, Calum Brannan, commented:

“The buy-to-let sector can be a minefield for the amateur investor and now more than ever, it’s imperative that you do everything you can to maximise the return on your investment.

While technology now allows a greater level of control and service when managing your investment at a lower cost via online platforms, it isn’t just about the financial side of things. Providing a fit for purpose property is not only a legal requirement but essential to ensure a happy tenancy and a reduction in void periods.

Of course, things can go wrong and having the budget available to fix them is a must. In the worst-case scenarios, a cash pot equal to one percent of your property’s value might not be sufficient, but it should cover you for most eventualities and is a good benchmark to start on.

As with all buy-to-let investments, good preparation, organisation, and education are key, and whether you go it alone or have a great management agent if you stay on top of things, a bricks and mortar investment is still one of the best you can make.”

Annual maintenance savings pot based on 1% of the average house price in each area.
Location
Estimated Annual Maintenance costs
London
£4,746
South East
£3,292
East of England
£2,920
South West
£2,602
West Midlands Region
£2,013
East Midlands
£1,942
North West
£1,677
Yorkshire and The Humber
£1,657
North East
£1,328
England
£2,507
Wales
£1,644
Scotland
£1,550
Northern Ireland
£1,400
United Kingdom
£2,344
Ranking – by highest estimated annual maintenance costs
Location
Estimated Annual Maintenance costs
Kensington And Chelsea
£12,292
City of London
£8,979
City of Westminster
£8,971
Camden
£7,936
Hammersmith and Fulham
£7,165
Islington
£6,610
Richmond upon Thames
£6,508
South Bucks
£6,091
Wandsworth
£6,022
Elmbridge
£6,019
Hackney
£5,666
Haringey
£5,463
Chiltern
£5,385
Barnet
£5,231
Merton
£5,157
Lambeth
£5,156
St Albans
£5,153
Southwark
£5,087
Kingston upon Thames
£5,066
Brent
£4,948
Ranking – by highest estimated annual maintenance costs outside of London
Location
Estimated Annual Maintenance costs
South Bucks
£6,091
Elmbridge
£6,019
Chiltern
£5,385
St Albans
£5,153
Three Rivers
£4,935
Windsor and Maidenhead
£4,865
Mole Valley
£4,750
Hertsmere
£4,678
Waverley
£4,653
Epping Forest
£4,599
Guildford
£4,595
Cambridge
£4,559
Epsom and Ewell
£4,529
Tandridge
£4,480
Winchester
£4,386
Brentwood
£4,320
Woking
£4,281
Sevenoaks
£4,255
South Oxfordshire
£4,231
Oxford
£4,184
Ranking – by lowest estimated annual maintenance costs
Location
Estimated Annual Maintenance costs
Burnley
£846
Blaenau Gwent
£945
Hyndburn
£1,000
East Ayrshire
£1,010
County Durham
£1,033
Pendle
£1,034
Inverclyde
£1,060
Merthyr Tydfil
£1,060
North Ayrshire
£1,085
West Dunbartonshire
£1,091
North Lanarkshire
£1,091
Blackpool
£1,096
Blackburn with Darwen
£1,111
Stoke-on-Trent
£1,121
City of Kingston upon Hull
£1,131
Hartlepool
£1,135
Rhondda Cynon Taf
£1,145
Middlesbrough
£1,172
Sunderland
£1,180
Redcar and Cleveland
£1,185

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