Landlord concerns over rising inflation

As inflation exceeds a 30 year high, with no indication of slowing down, the rapidly rising cost of living is a real concern for many. With mortgage interest rates on the rise, a recent survey reveals how many landlords are concerned about the impact on their property investments, and what they expect the implications to be.

A staggering 83% of landlords are ‘concerned or very concerned’ that the rising inflation rate will impact their ability to invest in property in the UK according to a survey conducted by GetGround. However, whilst these concerns are starting to encourage landlords to take action to protect themselves from the rise in costs, GetGround doesn’t expect to see a complete change in market investment behaviour.

The results of the survey reveal landlord expectations of the impact of the rise in inflation costs.

• 90% of those asked expect inflation rises to impact the cost of upkeeping their property portfolio.
• 52% expect their outgoings for managing their properties to increase by between 25% to 50%.
• 10% expect their costs to increase by over 50%.

As mortgage finance, energy bills (both 52%), and insurance premiums (44%) are listed as the top three areas of property investments that are the likeliest to feel the impact of a rise in inflation, it is no surprise that landlords have the above expectations for the sector.

However, despite their expectations, as a whole landlords plan to remain within the private rental market. Only 29% of landlords are planning on reducing their investment activity during this period of high inflation. Of the remaining 71%, 33% are going to continue on as they currently are, and an encouraging 24% plan on increasing their property investment activity. This not only shows landlord perseverance, but confidence in the sector.

Despite the portrayal of landlords sometimes seen in the media, 69% of landlords reported feeling a responsibility to help tenants through this cost-of-living crisis. When asked which measures they’d take to support tenants, 37% backed temporarily freezing rents, 35% supported making energy efficiency upgrades and 34% agreeing longer tenancies. Each measure will provide tenants with extra security to get them through this tough time, and it’s positive that landlords still have the necessary resources to provide this support whilst going through this cost-of-living crisis themselves.

The CEO of GetGround, Moubin Failzullah Khan, commented on the survey’s positive results, showing the “enduring appeal of property investment”. He goes on to mention the continually high rental demand that landlords can benefit from, due to the number of prospective tenants and “positive value growth”. Khan summarises the landlord response as “meaningful and long-term, proving that blending longer-term thinking with empathy actually makes better business sense”.

To check whether your property finance is helping you achieve the most profit from your investments, speak to one of our experts. Our whole-of-market brokers can help you to secure the best rates for your portfolio. Submit an enquiry here, or call our broker line on 0345 345 6788.

1st April 2022