What inflation means for landlords?
It is clear that inflation (10.1% in Jan 2023) is affecting everyone today. As a property management company for HMOs and family homes as well as being property owners, we can see how inflation hit us and our tenants on a daily basis.
The press often attacks landlords. Headlines like: “Asking rents hit record highs in final months of 2022, says property website“, “Almost a million private renters under threat of eviction, poll finds“, “Landlord repossessions almost doubled at end of 2022, charity says“, etc sell papers and give a poor and biased view of the private sector.
Like with everything, there are good and bad apples, but let me tell you a few real stories. Let’s start today with Steve.
Steve is a decorator/handyman who became a landlord when he bought a couple of properties in 2007 to complement his retirement. He is now in his mid-60s now and still working.
Since he bought those properties, he has been dealing with good and bad tenants, new boilers, roof repairs, etc which he had to pay from his own income/pocket.
Then, in the last year alone his two mortgage payments increased by 110% and over 142% respectively.
Because he is renting to two families on benefits, the rent has not changed. This is because the Local Housing Allowances paid to tenants on benefits have been the same since 2020 and there will be no increase in 2023. Evicting the tenants is not even in his mind. They are good and have been renting from him for years.
Steve is now considering selling his two houses, but because he bought them during the last housing boom (like so many others) after the housing crash in 2008, the value of the houses went down and has not increased significantly since. So selling is not going to give him much of a retirement either.
For all the effort and money he has put in over the years to have some retirement income, the outcome is not great.
There are many landlords like Steve. People who have been helping the private sector by providing decent and affordable housing to families.
Luckily for Steve, he had approached us and we had in place for him a specific management contract under which we pay him a fixed income for his properties and we pay his mortgage (no matter which amount) and manage his tenants and maintenance at no charge for him. At the end of the contract, we buy his house.
If you want to know more about our rent-guaranteed and purchase services for landlords, get in touch today: info@amalida.com or 0113 519 1369.