Half of landlords say PRS is tougher – and 62% will put up rents

Life as a landlord in 2022 didn’t get any easier and new research reveals that nearly half of landlords say their life is harder than it was a year ago.

The findings from Aldermore also show that nearly two out of three landlords will be putting their rents up this year.

Jon Cooper, the head of mortgages at Aldermore, said: “2022 was marked by troubling developments to the economy and the property market has faced some significant challenges.

“With the cost-of-living crisis already impacting tenants, homeowners and landlords alike, the outlook for next year seems tricky to predict.”

‘Healthy and positive opportunities for landlords’

He added: “However, as our Buy to Let City Tracker has revealed, there remain healthy and positive opportunities for landlords in the UK.

“As we head into 2023, landlords should work closely with their brokers to assess their portfolios and identify opportunities that lie ahead.”

However, the bank’s findings paint a varied picture, with more than half (54%) of landlords still feeling optimistic about the future.

And two thirds (66%) state that being a landlord remains a good way to make money.

Unable to expand their property portfolio

With record levels of inflation, the cost-of-living crisis and housing market volatility, nearly half (48%) of landlords have been unable to expand their property portfolio.

Looking ahead, two out of five (42%) say they will consider downsizing if market conditions continue as they are.

In a bid to maximise returns in the current environment, four out of 10 (42%) say that if they were to expand their portfolio, they would buy property using a limited company.

Have no choice but to put up rents by at least 10%

With an uncertain outlook for landlords, nearly two-thirds (62%) say that if market conditions continue as they are, they will have no choice but to put up rents by at least 10% in the next 12 months.

The rent rise will undoubtedly add to the pressures faced by tenants amid soaring energy prices and rising living costs.

Yet, it appears that landlords are conflicted with passing on costs in an already difficult climate, with just under two-thirds of them (64%) being worried their tenants may not be able to pay their rent because of rising bills.

Looking ahead, a need for landlords to make their portfolios more sustainable and meet the Government’s EPC regulations, sees nearly six out of 10 landlords (58%) saying that the sustainability and energy efficiency of their property portfolio is a priority for them.

And, to get ahead of the regulations, more than half (53%) are planning to carry out property improvements in the next 12 months to improve the energy efficiency of their portfolio.