Landlords who neglect property maintenance could potentially knock tens of thousands of pounds off the value of their investments, according to research from Rushbrook.
The property management specialist estimates that poor maintenance could reduce the value of a rental property by between 10% and 15%, depending on its condition.
With the average landlord-owned property in England valued at an estimated £201,145, Rushbrook calculates this could equate to a reduction of between £20,115 and £30,172.
The potential financial impact is greatest in London, where the average landlord property value stands at £390,625.
Applying the same assumptions produces a potential reduction of between £39,063 and £58,594.
£43,000 AT RISK IN SOUTH EAST
The South East has the second-largest potential exposure, with Rushbrook estimating poor maintenance could reduce the value of the average £285,714 landlord property by as much as £42,857.
The maximum estimated reduction stands at £34,286 in the South West, £31,034 in the East of England and £28,696 in the West Midlands.
Even in England’s more affordable markets, Rushbrook estimates the potential impact at £26,163 in the East Midlands, £22,959 in the North East, £21,226 in Yorkshire and the Humber and £21,196 in the North West.
MAINTENANCE ‘FALSE ECONOMY’
Rushbrook warns that landlords attempting to reduce expenditure by postponing maintenance could ultimately face larger repair bills as well as deterioration in the property’s capital value.
Roma Sharma (main picture, inset), Managing Director of Rushbrook, says: “Landlords have faced a considerable increase in the cost and complexity of operating a rental property in recent years and so it’s understandable that many will be looking closely at where they can reduce expenditure.
“However, there’s an important distinction between sensible cost management and creating a false economy, and property maintenance is one area where delaying expenditure can end up costing considerably more in the long run.
“A relatively minor issue that is identified and dealt with quickly can often be resolved efficiently, whereas allowing it to deteriorate can result in a much larger repair bill, disruption for the tenant and, over time, a deterioration in the overall condition and value of the property.”
PROTECTING LONG-TERM VALUE
Sharma says landlords should view maintenance as part of protecting the performance of their investment rather than simply an operating expense.
She adds: “Regular oversight, proactive maintenance planning and access to reliable contractors can help identify issues earlier and ensure that money is spent where and when it’s actually required.
“Ultimately, a rental property is a long-term asset and maintaining it to a professional standard is fundamental to protecting both the income it generates today and the capital value a landlord hopes to realise in the future.”
