The average void period between tenancies in England is 15 days, according to lettings platform Goodlord’s September rental index. This works out at £684.50 in lost rental income for an average-priced new let.
In addition, landlords face around £800 in “clean-up and prep” costs per new tenant – including routine maintenance, furniture and lock replacement, and council tax during the void period – according to internal polling from the National Residential Landlords Association (NRLA).
The NRLA also estimated that the typical cost of letting and management fees is £253, along with £52 to undertake referencing for two tenants. In total, a typical landlord could lose out on £1,789.50 for each change of tenant – or up to £7,158 a year.
Taxes and legislation targeted at landlords have pushed up costs for property investors over the last decade. This has forced many to quit the market and put upward pressure on rents.
Analysis for The Telegraph by estate agents revealed that a typical London landlord has seen their profits plummet from £2,200 in 2013 to a £1,300 loss this year, despite near identical interest rates.
The number of rental properties has doubled since 2000. However, supply to the rental market has stalled in recent years. Landlords have sold 300,000 more properties than they bought since 2016. Meanwhile, average rent for new lets has hit £1,369 per month, up 5pc in the past year.
The Renters’ Rights Bill has been dubbed the biggest overhaul of rental law in 30 years. It will end fixed-term tenancies, stop landlords from taking action against non-paying tenants for up to three months, and ban bidding wars by requiring landlords and letting agents to publish an “asking rent” for the property.
The legislation will also eliminate Section 21, otherwise known as “no-fault evictions”, for all new and existing tenancies from next summer.
This means landlords will need to rely on Section 8 to evict a tenant, a piece of legislation undermined by court delays which reached 55 weeks on average last year.
Tim Douglas, of estate agency trade body Propertymark, said reducing tenancy lengths would put further pressure on landlords to raise rents.
He added: “The legislation is littered with unintended consequences. It makes things less secure for a landlord, as they don’t know how long tenants will be in situ.
“You could see more landlords advertise unfurnished properties, move to short-term lets where there is less regulation, or increase rents to cover higher costs and re-let charges.”
