Landlords overlooking costs

According to a report by YouGov landlords have unrealistic expectations of property returns and are failing to consider the effects of a range of costs. The data from YouGov's Landlords and Mortgages 2013 report contradicts the view held by lenders that the buy-to-let market has improved since the financial crisis with lenders claiming that post-crisis investors are focused on long-term returns, while the YouGov data suggests that landlords were naively counting on "illusions" of gains. It said landlords' total returns were in long-term decline, despite reported evidence of rising rents with rental returns now between 1% and 4% compared with between 4% and 6% in the 2002-06 period. One reason for weaker returns was landlords' propensity to overlook costs. "While 93% consider mortgage interest payments, only 68% take account of agency fees and 46% budget for other management expenses," the report said.

The Sunday Telegraph, Money, Page: 4