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Landlords UK: Rising inflation it’s wreaking havoc

Experts predict inflation is set to continue for 2023, for at least another six months, with the latest CPIH figure revealing a rise of 9.2% in the 12 months until December 2022.

With the rental market feeling the effects of inflation too, London-based lettings agency JOHNS&CO is giving landlords a few pointers on how to navigate the current economic landscape that doesn’t just involve hiking up the rent.

Clynton Nel, Residential Director at JOHNS&CO, said: “Despite wages having grown at the fastest rate in 20 years, pay packets are failing to keep up with the current cost of living crisis. It is a good idea for landlords to explore any and all options to reduce their outgoings in relation to their investment. Rising market rents are well documented and most landlords welcome the demand led increases. Why wouldn’t they, having been subjected to numerous tax and legislative changes over the last few years? These changes have placed huge downward pressure on rental yields and overall viability of providing accommodation for renters and most recently the interest rate hikes across the mortgage market have added to that pressure.”

Firstly, JOHNS&CO recommend landlords consider both their long-term and short-term options to beat inflation. Despite forecasts predicting that inflation will lower in the second half of 2023, the economy is volatile and it is important to be prepared for further rises or a period of sustained higher costs when compared to the relatively low rates following the financial crisis in 2008

Landlords should explore mortgage lenders regularly, shopping around to identify if it is worth switching lenders for a better rate. There are many benefits of switching, particularly if you have been on the same deal for a number of years, you may find your current deal isn’t competitive and that you can in fact get a better interest rate. Or perhaps you want to overpay to clear your mortgage quicker and your current lender won’t let you do this without paying a hefty penalty.

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