Investors thinking about pumping money into property in exchange for a healthy rental income were today warned about the rising cost of becoming a reputable landlord.

The Residential Landlords Association, whose members control more than £1.2billion worth of property and 30,000 tenancies across the UK, warned those considering buying to rent that the price of supplying property to private sector tenants is increasing at an alarming rate.

According to the association, most of the costs are associated with stealth taxes, ever-increasing local "taxes" and regulation creep.

But with the average property now costing more than £100,000, stamp duty on purchases is also beginning to bite into the profits investors would expect too.

Martin Moylan, RLA chairman, explained: "Stamp duty is also payable by landlords and tenants on lettings of more than £94.16 a week and changes being introduced by the Inland Revenue in April will undoubtedly drive up accommodation costs.

"The changes relate to the removal of a concession for landlords of domestic property where they can obtain a tax deduction for the repair element of an improvement but from next year the practice will be outlawed.

"Landlords in Scotland, where licensing has been introduced, are reporting that it can cost thousands to comply while landlords as a whole are discovering the cost of letting to housing benefit tenants has increased dramatically because of regulation creep."

And Mr Moylan warned that the knock on effect of escalating costs for landlords would only lead to higher rents in the private sector.

He added that, due to new regulations that came into force in April, landlords now have to pay 50 per cent of the council tax on an unoccupied property.

He added: "Tenants will have to meet these costs eventually either through higher rents or lower standards. Inevitably in a situation like this something has to give.

"As people opt out of investing in property we will inevitably see a shortage of properties in the private sector which will again lead to higher rents.

"It all adds up to worrying news for tenants and landlords alike."

The RLA is a leading voice for landlords in the UK with branches for members across the country. Landlords affiliated to the group have to meet rigorous selection criteria and provide references. The association also operates a strict code of practice all members are required to adhere to.

Among the benefits to members, the association offer members advice, a special advice hotline for landlords and other benefits including special rate insurance, training courses and tenancy agreement contracts accredited with the prestigious Crystal Mark from the Plain English Campaign.

The association also operates a website to help tenants find homes available with RLA accredited landlords at www.homes2rent.net. The site is free for all landlords while rla.org.co.uk provides further, helpful information.

ENDS December 2000