There’s rather a lot going on in the economy as I write this and, by the time it is published, who on earth knows what will have happened politically? 

We may even have a new, new Prime Minister if the rumours of letters being submitted to the 1922 Committee already are true.

But hold on for a second, because for some the events of the last few days and weeks may be a positive thing. Just bear with me before you throw your phone at the wall.

First, the negatives – and I write this from the point of view of a landlord (I am one) and an estate and lettings agent (I’m one of those too).

– Interest rates are, for now, higher and therefore so are variable rate and new fixed rate buy-to-let mortgages. 

– Property market sentiment has taken a hit and some so-called experts are predicting house prices will drop. The drooling sensationalism in the national news media does not help matters. 

Ok, all well and bad. 

But, actually not really.

You see, 55% of landlords have mortgages (Source: English Private Landlord Survey) and therefore 45% have no mortgage at all. Many that do have mortgages are on fixed rates and therefore the rate turbulence that we’re seeing will not affect their mortgage payments and so I estimate that around three-quarters of landlords are unaffected by base rate increases currently.

Moreover, even if prices fall (I don’t think they will albeit that the rate of growth will definitely reduce in the short term) then landlords only see that ‘paper-loss’ on disposal and therefore the loss is seldom actually realised. And so it’s not really a loss at all. 

And here are some further positives that you may not have considered… 

– Rents and therefore yields are rising, up 3.4% annually. And the rate of increase is growing compared to earlier this year. In fact London is seeing its strongest rate of rent growth since 2016. The East Midlands just saw an annual rate of increase of 4.5% as the country’s most buoyant region of all (Source: ONS).

– Tenant demand is climbing, reports the RICS UK Residential Market Survey (July).   

– Supply of stock will now be even lower as some cautious sellers sit on the fence wondering what to do. This will accentuate shortages and lead to upward pressure on prices. House builders release new builds when the market is buoyant and therefore they will rein in supply whilst the economy settles, thus creating further shortages. 

– Foreign buyers will be encouraged to invest in British property because the weak pound just made prices about 25% cheaper than a month ago for them. Expect to see the London market benefit the most from this. More overseas students too, buoyed that their money now goes further, will add to the tenancy demand pot. 

Reasons for optimism? Well yes compared to what’s on the news currently, relatively speaking.

It could be worse, we could have a Labour government and rent caps and higher taxes to deter us all as part of Keir Starmer’s pledge to increase UK homeownership from 63% to 70%, as he announced at the Labour Party conference. 

This would all be at the expense of the PRS, of course. 

But thankfully, this is a politician’s pledge and we all know how worthwhile they are and so we needn’t worry too much about that.

So despite the current environment it’s still great to be a landlord, isn’t it?

* Marc von Grundherr is Director of the London and International Estate and Letting Agency, Benham & Reeves *