How are landlords dealing with the cost of living crisis?

Times are tough, and costs for most things are going up.

Landlords are not billionaires or (for the most part) millionaires. The vast majority are ordinary middle or working-class people who have managed to acquire one or more properties to rent as an investment.

For example by investing in a buy-to-let as an alternative to a traditional pension, inheritance or maybe by having a spare property after two homeowners start living together.

Landlords are as affected by the cost of living crisis as everyone else.

There are many outgoings they will need to pay – whether or not their tenants are paying rent – such as their mortgage, insurance, agency fees (if they use agents), repair and maintenance expenses and the cost of complying with their legal obligations to carry out gas and electricity inspections and the like.

No doubt there are other expenses I have omitted.

The Landlord Trends Report

In an interesting post here, Property Reporter reported on the Q1 2024 Landlord Trends report carried out by Pegasus Insight in March and April 2024 on behalf of Foundation Home Loans.

The report was based on 774 online interviews. Multiple responses were allowed – which is why the percentages come to more than 100%! Many of the landlords reported multiple changes.

So, what did the report discover?

• 30% of landlords said they had renegotiated their mortgage with their existing lender
• 29% said they had increased rents
• 25% had cancelled plans to purchase additional property,
• 22% had remortgaged to another lender,
• 15% said they had paid part of their monthly mortgage payment out of non-rental income like savings,
• 15% said they had sold a property to reduce their mortgage outgoings.
• 17% said they now carry out more of the property management themselves
• 8% said they had switched away from letting agents to self-management.

The article does not state how many landlords are selling up and leaving the sector. But as the various articles citing this report are approaching it from the point of view of mortgage advisors and the opportunities now available to them, no doubt this was of less interest!

Moving to self-management

I am not surprised that a significant number of landlords are taking on more management or moving to self-management.

Agent fees are a significant cost, and in the current cost-of-living crisis landlords need to be sure that agent fees are cost effective.

In a large number of cases, they will be – many agents are fantastic and do a brilliant job for their landlords. However, others less so.

Many landlords joining my Landlord Law service tell me that they are taking on the management of their property themselves because they are so unhappy with their agent’s service.

If YOU are considering this, take a look at my free guide here, which will help you decide whether self-management is right for you.

If you have problems with your agents, you can read about our ‘dealing with problem leltting agents guide’.

Your feedback

Landlords – what is your view of the report? Are you carrying out any of the cost-saving measures set out in the report?

Do you have any suggestions for other cost-saving measures?

Let us have your comments in the comments section below (note that comments close after 90 days).