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

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

10:34 AM, 3rd January 2023, About A year ago 6

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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.


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Comments

Seething Landlord

12:09 PM, 3rd January 2023, About A year ago

Just to pick up on the last point, how can you get ahead of regulations that have not yet been published? Spending money now that might not count towards the maximum expenditure required under new regulations could be the worst decision ever.

Luke P

12:29 PM, 3rd January 2023, About A year ago

Reply to the comment left by Seething Landlord at 03/01/2023 - 12:09
Govt. have realised what an utter shambles the PRS would be if they press ahead with the EPC nonsense, so it's just sitting doing nothing...at least that way it can't be officially called a U-turn...

JeggNegg

23:05 PM, 3rd January 2023, About A year ago

can someone please help me try and understand the thinking on my EPC. To increase the loft insulation from 100 to 270 mms to increase my EPC score by 2. without a warning that this might reduce the temperature in the loft. A contact of mine followed this recommendation and during the cold spell his pipes in his loft froze, and when they thawed out he had a flood in loft, bedrooms and ground floor. .what am i not understanding? should we be insulating the inside of the roof tiles with aluminum reflecting foil rather than the loft floor?

Jamie Angus

16:15 PM, 4th January 2023, About A year ago

Reply to the comment left by Jonathan Cocks at 03/01/2023 - 23:05
I work with the energy efficiency industry. From what you have said your friend either did the loft top up himself or used someone who didn't really know what they were doing. Where loft insulation is installed then any pipework should also be insulated to prevent what you described. I don't see a need for you to have to opt for a much more expensive pitched roof insulation model. Use a reputable installer, preferably with PAS2030 credentials, and ensure that the installation takes into consideration ventilation and pipework insulation.

JeggNegg

20:25 PM, 4th January 2023, About A year ago

Reply to the comment left by Jamie Angus at 04/01/2023 - 16:15
thank you for your response. that additional information has mase a lot of sense.

Jessie Jones

15:30 PM, 7th January 2023, About A year ago

Reply to the comment left by Seething Landlord at 03/01/2023 - 12:09
Yes, I find it hard to imagine that 53% of landlords are planning energy efficiency improvements. In fact, the anecdotal evidence I have heard is that landlords are deliberately holding off on energy performance improvements because of the wild uncertainty of what any new regulations might state. No point in upgrading boiler efficiency if new EPC criteria favours electric heating. No point in installing solar if grants favour heat pumps. No point in spending a single penny if the new rules are so expensive that a landlord will not be able to make any profit on a property and is forced to sell it.

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