Unhappy New Year: it’s tougher than ever to be a landlord

New research has found that nearly half of landlords feel it’s harder being a landlord now compared to the start of 2022.

Yet although 49 per cent of respondents to a survey by Aldermore say it’s tougher, there is some optimism - 66 per cent remain adamant that being a landlord remains a good way to make money.

Aldermore’s survey, by Opinium, was conducted between November 23 and December 7 amongst 500 UK landlords.

With record levels of inflation, the cost-of-living crisis and housing market volatility, some 48 per cent of landlords say they have been unable to expand their property portfolio and looking ahead, 42 per cent will even consider downsizing, as a result, if market conditions continue as they are.

In a bid to maximise returns in the current environment, 42 per cent say that if they were to look at expanding their portfolio, they’d purchase as a limited company.

As the outlook for landlords appears uncertain, nearly two thirds say that if market conditions continue as they are, they’ll have no choice but to put up rents by at least 10 per cent in the next 12 months – adding to the pressures faced by tenants amid soaring energy prices and rising living costs.

Yet the survey suggests landlords are conflicted with passing on costs in an already difficult climate, with just under two thirds of landlords worried their tenants may not be able to pay their rent in the near future because of the rising cost-of-living.

The survey also considered energy efficiency issues as landlords seek to make their portfolios more sustainable and meet the government’s likely EPC regulations.

Nearly six out of 10 landlords say that the sustainability and energy efficiency of their property portfolio is a priority for them. In an effort to get ahead of the regulations, with 53 per cent planning to carry out property improvements in the next 12 months to improve the energy efficiency of their portfolio.

Jon Cooper, head of mortgages at Aldermore, says: “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 2023 seems tricky to predict.

“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. At Aldermore, we always want to help people to go for it in life and in business. We’ll continue to offer our broker partners and borrowers the tailored and expert support that they need.”

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