HMO landlords are spending nearly half of their rental income on maintenance bills, according to research from Pegasus Insight.
A survey of 872 landlords found those with HMOs are spending more on maintenance bills as costs rise than non-HMO landlords.
The former were found to be spending an average of 45% of their rental income on maintenance bills, while the latter spend an average of 25%.
Pegasus has found that property maintenance and repairs remain the largest single cost faced by landlords, accounting for between 31% and 39% of total portfolio expenditure, depending on property type.
Average total annual expenditure stands at £19,604 for landlords with non-HMO properties, rising to £35,720 for those operating HMOs.
The average BTL portfolio generates gross income of £79,000 per year. The primary difference in spend distribution between HMO and non-HMO landlords is the amount spent on utility bills, which is more than four times higher for HMO landlords (16% vs. 4%) who more commonly include these in the rent they charge.
“Our wider research shows that landlords are investing more than ever to keep properties safe, compliant and habitable, yet maintenance remains a pressure point in the rental relationship,” said Mark Long, founder and director at Pegasus Insight (pictured above).
“Rising labour costs, supply chain issues and higher tenant expectations all make delivering timely repairs more challenging.
“The risk is that sustained increases in upkeep costs ultimately feed through into higher rents, as landlords look for ways to fund the ongoing investment required to keep properties in good condition.”
