Rising Inflation Hits Landlords
Research has found that a whopping nine out of ten landlords expect rising inflation to impact their investment property maintenance costs.
Landlord portfolio platform GetGround created a poll and the results showed that more than half (52%) of respondents expect the cost to jump between 25% – 50%. And 10% of those surveyed expect an increase of 50% or more.
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Landlords are not the only ones feeling the pinch, with tenants spending 42% of their income on rent and energy bills surging, belts are tightening throughout the country.
The three areas of property investment most likely to be impacted by inflation are:
- Mortgage finance (52%). This will affect landlords looking to remortgage or grow their portfolios, as well as tenants looking to take their first step on the ladder
- Energy bills (52%). This will also affect both landlords and tenants, as many look to save on their bills by making energy efficiency updates to their properties and changing habits
- Insurance premiums (44%). This could affect tenants who have contents insurance, but is more likely to hit landlords, so be sure to shop around for your best deals on Rent Guarantee Insurance, Home Emergency Insurance and Tenants’ Contents Insurance
Inflation is being forecast to rise above 8% during much of 2022 according to some experts and 83% of those who took part in the poll, said they were ‘concerned or very concerned’ that this would have a negative impact on their ability to ‘continue to invest profitably in rental property.’
Will this cause a change in landlord behaviour?
The survey of several hundred UK landlords indicated that despite measures being created to offset these rising costs, prompted by landlord concern, there won’t be a widespread change in investment behaviour.
- 29% will look to reduce their property purchases while inflation is high
- 24% plan to increase their portfolio during this time
The survey also revealed that a huge number of landlords are looking for ways to help their tenants alleviate the rising living costs:
- 69% of landlords said they felt responsibility to help
- 37% are considering temporarily freezing rents
- 35% are looking to make energy efficiency upgrades
- 34% are agreeing longer tenancy agreements
CEO of GetGround, Moubin Failzullah Khan, said:
While, like the rest of us, property investors aren’t immune to the impact of rising inflation, our research shows most UK landlords don’t want to pass that burden onto tenants, if they can help it.
Khan added that ‘longer-term thinking with empathy’ makes better business sense for landlords. How will you be accommodating your tenants?
