Landlord or tenant - Capital costs keep creeping up

London has been named as not only the most expensive city in the UK for landlords, but as one of the most expensive cities in the world for tenants.

Research from Kent Reliance has revealed that on average, landlords in the capital spend a stonking £6,535 a year before tax maintaining their property business, which is almost double the national average of £3,632.

This figure, which doesn’t consider mortgage costs or tax liabilities, works on the costs landlords face when budgeting for repairs, maintenance and void periods.

However, despite the figure being much higher than the average, it does remain proportionate to the rent, unlike the figures in Wales. Whilst landlords in the Valleys need to put aside an average of £2,211 to pay for the costs associated with providing a property for the private rental sector, lower rental rates means that this figure represents 41% of the average Welsh landlords’ annual property income. Across the UK, the average figure is £3,632 a year – equivalent to 34% of the rental income.

Costs aren’t just creeping up for landlords though. Research from RENTCafe and PricewaterhouseCoopers has confirmed what many tenants already know – London is officially one of the world’s priciest cities. The PWC identified the top thirty ‘Cities of Opportunity’, analyzing locations which offered the best opportunities with regards to infrastructure, intellectual capital, sustainability and ease of doing business.

London topped the PwC chart, coming in above heavy hitters such as New York, Hong Kong and Tokyo. However, when RENTCafe analysed the list with regards to how much money people earn in these cities and whether these salaries are high enough to afford a rental property, it was quite a different picture, with London sliding down into 22nd place!

The analysis revealed that the average tenant would need to spend 40% of their income on rent in the capital, compared to just 20% in the top-ranking city, Kuala Lumpar. Mexico City was the least tenant-friendly city, with tenants having to put aside 60% of their monthly earnings to pay for rent.

The table below shows the two rankings side by side, detailing the percentage of income that tenants have to put aside to pay their rent:


PwC Cities of Opportunity


RENTCafe's Tenant friendly cities

1

London, Great Britain

1

Kuala Lumpar, Malaysia

20%
2

Singapore, Singapore

2

Moscow, Russia

21%
3

Toronto, Canada

3

Johannesburg, South Africa

27%
4

Paris, France

4

Bogata, Columbia

27%
5

Amsterdam, Netherlands

5

Rio de Janeiro, Brazil

27%
6

Manhattan (New York City), USA

6

Sao Paulo, Brazil

27%
7

Stockholm, Sweden

7

Beijing, China

27%
8

San Francisco, USA

8

Shanghai, China

28%
9

Hong Kong, Hong Kong

9

Sydney, Australia

29%
10

Sydney, Australia

10

Milan, Italy

29%
11

Seoul, South Korea

11

Toronto, Canada

29%
12

Berlin, Germany

12

Berlin, Germany

30%
13

Chicago, USA

13

Seoul, South Korea

30%
14

Los Angeles, USA

14

Tokyo, Japan

31%
15

Tokyo, Japan

15

Hong Kong, Hong Kong

32%
16

Madrid, Spain

16

Madrid, Spain

32%
17Dubai, UAE17

Stockholm, Sweden

34%
18Milan, Italy18

Amsterdam, Netherlands

35%
19Beijing, China19

Jakarta, India

37%
20

Kuala Lumpur, Malaysia

20

Chicago, USA

38%
21Shanghai, China21

Dubai, UAE

39%
22Moscow, Russia22

London, UK

40%
23

Mexico City, Mexico

23

San Francisco, USA

41%
24

Johannesburg, South Africa

24

Mumbai, India

41%
25

São Paulo, Brazil

25

Singapore, Singapore

44%
26

Bogotá, Colombia

26

Paris, France

46%
27

Rio de Janeiro, Brazil

27

Los Angeles, USA

47%
28

Jakarta, Indonesia

28

Lagos, Nigeria

57%
29

Mumbai, India

29

Manhatten, New York, USA

59%
30

Lagos, Nigeria

30

Mexico City, Mexico

60%

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