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By Moubin Faizullah Khan

Chief Executive, GetGround

OTHER FEATURES

Cost Crisis: why offering tenants support makes good sense

Landlords are many people’s favourite pantomime villains, on the hunt to hike rents and squeeze profits. The reality, however, is proven to be different. Not only are property investors well aware of the financial challenges on the road ahead for their tenants, they actually feel some responsibility towards helping them.

At GetGround, we recently polled hundreds of property investors on their attitudes in a time of high inflation, for landlords and tenants alike. We found that more than two-thirds of landlords (69%) feel they have a responsibility towards their tenants to help mitigate the impact of the ongoing cost of living crisis on their lives.

Not the time for a rent rise

In fact, landlords are actively planning to act in order to provide their tenants with support during this challenging time. For example, more than a third of landlords support temporarily freezing rents to provide their tenants with a little extra breathing room each month. It’s worth highlighting that this suggestion comes at a time when rents are rocketing ‒ in January, Rightmove reported that rents were growing at a record rate of almost 10%, off the back of competition from prospective tenants doubling.

Landlords would be more than justified in applying some level of rental increase in these circumstances, yet a significant portion would rather forgo that short-term gain in order to hold on to quality tenants.

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Acting on efficiency

A similar proportion of landlords (35%) intend to make energy efficiency upgrades to their rental properties, in order to support their tenants.

This is particularly timely, for a couple of reasons. Obviously the energy crisis is all too apparent at the moment, with Ofgem having announced an increase to the energy price cap from April which will see typical households paying almost £700 a year more for their use. Further increases appear likely, particularly given the ongoing situation in Ukraine.

Improving the energy efficiency of an investment property means that less energy will be used in order to keep it warm, and should therefore result in smaller energy bills. Spending less on energy could provide tenants with some welcome respite in this period of rising inflation.

However, it’s worth noting that improving a rental property’s energy efficiency is also a sensible move for landlords who want to keep ahead of changing requirements over which properties are suitable to be let.

Currently, rental properties must have at least an E rating on their energy performance certificate before they can be rented out, but this is increasing from 2025. At this point, properties will have to have at least a C rating for new tenancies, with these rules extended to all existing tenancies from 2028. 

How difficult it will be to hit this higher standard in time will vary for landlords based on their differing portfolios, and the extent to which they have prioritised energy efficiency in their purchases. 

However, it is striking how different awareness of these changing rules ‒ and attitude towards adapting to meet them ‒ is between professional landlords and amateurs. A recent study by Landbay found that while only half (54%) of landlords with up to three properties are aware of the changes, this jumps to 70% of those with four to ten properties, and 80% of those with more than ten.

Our own study found that a third of landlords intend to make the necessary improvements to their rental properties within the next six to 12 months, while one in five are aiming to do so within the next six months.

 

Locking down for longer

Another support measure backed by landlords is introducing a longer tenancy duration. This was a step supported by a third of landlord respondents, with the thinking that these longer tenancies provide tenants with a greater degree of certainty not only over the cost of their home, but for how long they will be paying it too.

It’s another reminder of how highly quality landlords value reliable tenants. Securing those tenants for the long haul is better off for everybody. The tenant doesn’t have to go through the upheaval of finding a new place to live, while the landlord avoids the inevitable stress and cost of having to find another tenant of a similar quality. 

If keeping hold of those excellent tenants means implementing rent raises at a slower rate ‒ or even not raising them at all ‒ then professional landlords will likely do it, just as they will often be open-minded to the idea of a longer tenancy.

It’s no secret that inflation is incredibly difficult at the moment, having hit its highest point in 30 years according to data from the Office for National Statistics. Yet substantial numbers of landlords are keen to offer the best tenants some level of support, not just out of a sense of responsibility but because it ultimately leaves their investments more secure, for the long-term.

* Moubin Faizullah Khan is chief executive of GetGround * 

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    It always makes sense to keep hold of '' good '' tenants but we landlords are also suffering from raising costs, tradesmen are increasing their rates, materials cost more as does insurance, and the big one coming is EPC up grades, £10k per property, these costs will be passed down to the end user as costs for any business are, blame the government not us

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    Rent controls or the threat of rent controls are the way to GUARANTEE rent increases for ALL tenants, good or bad.

    Look how the energy cap has played out, unable to combat market forces.

    Look how the minimum wage has driven down wages to that level, whereas before employers rewarded staff according to how well they did their job.

    Look at how banning unauthorised overdraft fees has hiked the cost of authorised overdrafts up to 40% Apr whereas before responsible borrowers could get overdrafts at 2% over base.

    Government intervention always harms the responsible majority and doesn't even help the feckless it's designed to protect.

     
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    A depressingly accurate post Robert. Seems like the current Government is only slightly less left-wing than the parties seeking to replace it. :-(

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    This article is bizarre. How can a landlord pay the tenants bills, unless it's in the contract,and even then it's still paid by the tenant.

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