Many former householders are seeking private rental sector (PRS) properties to escape the trials and tribulations of the current property market, as they would rather the landlord dealt with the hassles and costs. This news came at the beginning of May 2011, as tenancies & housing costs were announced as reaching a 3 year high.

According to research by Halifax the cost of owning and running a home in the UK has now reached its highest level since 2008, even though the UK has been experiencing historically low interest rates. The average annual cost associated of owning and running a residential property as a family home rose by 1.4% (£127) from £8,956 in March 2010 to £9,083 in March 2011. That is 3.5% (£328) lower than the annual total cost prior to March 2008 (£9,412).

Mortgage payments remain the largest single component of the cost of owning and running a home, accounting for 39% of total costs, however the 21% decline in mortgage payments since 2008 has resulted in the mortgage payment share of total housing costs declined from 48% in March 2008 to 39% in March 2011. Mortgage payments were the only housing expense category to see a fall between March 2008 and March 2011 and also recorded the biggest decline over the past year (-2%) driven by the substantial fall in mortgage payments for those with tracker mortgages.

The average mortgage rate paid by borrowers fell between March 2008 and March 2011 from 5.80% to 3.49%, helping to reduce the average annual mortgage payment (interest and capital repayments) by 21% (£956). When calculating housing expenditure (excluding mortgage costs) then housing related expenditure has increased by 13% between March 2008 and March 2011. That is greater than the 10% rise in inflation over the same time period.

Tenants paying rent rather than a mortgage have seen their housing costs rise by 10% over the same time period.

Property owners have really been feeling the pinch, since March 2008 with rises in 9 out of the 11 housing expenditure categories including:

Even when the UK housing market is broken down and looked at regionally, all regions have seen a fall in housing costs since 2008 to March 2011:

Halifax housing economist Suren Thiru, said: “Household finances remain under pressure with the significant drop in mortgage payments since 2008 mostly offset by increases in other household bills. Rising utility bills have been a clear driver behind this, along with increases in maintenance costs and council tax charges. The current strain on household finances is particularly concerning at a time when earnings growth remains weak.”

Despite having the highest absolute costs, property expenses are the lowest in London when expressed as a percentage of gross average full-time earnings (25%). Property owning and running costs are highest in relation to earnings in the East of England (31%).

So are landlords ready to capitalise on the current state of the economy?

Landlords who have surrounded themselves with like minded individuals, are active in the property networking community or members of a Landlord Association would say a resounding “YES!” as they have battled through legislation change, red tape, licensing, more regulation, housing benefit cuts and even more officialdom by working together and taking their fight to Downing Street.

Despite the increased costs of running a property it is still worth the hassle for many landlords. Providing quality accommodation for people looking for a place to call “Home” is the focus for landlords. Regulation has improved standards in areas across the country, bringing improvements in the quality of accommodation available for tenants thus creating demand and if the landlord makes a profit and invests back into their asset there can only be further gains for both happy tenants and good landlords.