Cost of Living Crisis - why landlords need help

To put it mildly, landlords are very rarely subject to an outpouring of sympathy from the general public. When the economy is in trouble – understandably, but unfairly – no one’s primary concern is how the property owners of the world will fare.

While landlords rarely get much sympathy, nor indeed would many want it, everyone in society should be taking the challenges they face seriously. The cost of living crisis is impacting everyone, and a lack of support for the private rented sector could have serious ramifications.

That’s because what impacts buy-to-let landlords impacts their residents. Particularly those who are the hardest hit by the cost of living crisis, including students. That’s through no fault of their own, but rather through the structural issues that are exacerbating households’ financial problems.

At UniHomes, working directly with students who use our platform to find their university home and who often pay for their utilities via our management packages, as well as with landlords and letting agents, we can clearly see pressure on both sides of the equation.

Students are being hit hard by the cost of living crisis. They seem to have been forgotten in how the government has looked to support households so far. Among the hardest hit, they’ve been the least supported. Because most students don’t pay council tax, they missed the rebate most households received earlier this year to help with their energy bills. In addition, students missed out on further support from the government by not being factored into direct payments made to low-income households.

This is amid a long-rumbling lack of support for the taxpayers of the future. According to student advice website Save the Student, more than eight in 10 students asked in its annual survey were worried about making ends meet, with four in five considering dropping out (with half of those attributing it to money worries). The survey found living costs have increased by 14% since last year’s survey, with still high inflation likely to turbocharge it further.

Consider that in the context of incomes. Maintenance loans for 2022/23 for a student living away from their parents are up to £12,667 in London and £9,706 outside London, up from £12,382 and £9,488 respectively for the 2021/22 academic year. That’s an increase of 2.3%. Save the Student estimates that a typical maintenance loan in England fell £439 short of covering the cost of living.

And of course, I’m preaching to the choir when it comes to the challenges that many landlords face. Along with tax hikes in recent years that we’re all too aware of, interest rate increases are adding huge pressure to mortgage repayments, while inflation is likewise biting into landlords’ and letting agents’ costs, as well as landlords’ ability to make further improvements to their properties, such as energy efficiency upgrades.

To date, including over the past couple of years through the Covid crisis, many landlords have taken financial hits in order to safeguard their residents. Many are continuing to do so, at great expense, with data on properties showing that any increases are not enough to cover increased costs. However, it shouldn’t be the case that those in the private rented sector are supported through philanthropy.

Part of the answer has to be in supporting students directly. We’re calling for maintenance grants to be widely reintroduced and at levels that actually address the cost of living, with debt written off given so much of it is unlikely to be repaid. At present, it just decreases renters’ future incomes and ends up as a taxpayer expense. While the Energy Price Guarantee was welcome when introduced, the Government should ensure that support continues indefinitely, whilst energy costs remain high, Students need a better deal than what they’re currently getting.

The other part must be in supporting landlords amid the cost of living crisis. By ignoring the landlord’s involvement in the equation, we’ll fail to make structural changes that help residents in the long run. The government should invest in an urgent and national insulation programme, making homes up and down the country more efficient to help everyone – including students – through the energy crisis.

Landlords pay a hugely important role in our society and our economy, both now and in supporting the taxpayers of the future. They – and their residents – must receive support that helps them in the short-term and creates structural change in the long-term. Otherwise, we’ll be right back here in six or 12 months’ time.

* Phil Greaves is Director and Co-Founder of UniHomes *

Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.