Everyone’s worried about the cost of living crisis, with food prices and interest rates rising, wages falling in real terms and energy costs rocketing. Up to 14 million people in the UK could be in financial difficulty by the end of 2022 and your tenants could well be among this number.
What can you, as a landlord, do to help your tenants? Thankfully, the answer is quite a lot and you’ll also be helping yourself in the process.
Start off by talking to your tenants
Have a talk with your tenants and find out whether they’re worried about impending rises in their food and energy bills. If they are, then let them know that you’re ready to work with them to make life easier.
Ask your tenants if they know how much their energy bills are likely to increase by and if they can switch supplier or make any other changes to reduce their outgoings. Offer them advice on reducing their consumption, such as washing clothes at 30C or using a slow cooker. Make it clear that you won’t just jump straight to eviction if they’re struggling.
Look at how you can help to reduce your tenants’ energy usage
If your tenants are willing to reduce their energy consumption then it’s a good idea to help them along by replacing older and less efficient appliances in the property.
This won’t just help your current tenants, it’ll also help you to attract new ones in the future, especially if you install solar panels, for example, or a heat pump. Many improvements like this are tax-deductible expenses, so can be well worth it.
You can also look into improving the insulation in the property, as well as installing flow restrictors on shower heads and taps to save on water.
Try to maintain some stability
We all know that landlords sometimes have to increase the rent, but if you can avoid doing this for a while, do so. Even if your current tenancy is approaching the end of its fixed term, it might not be the right time to raise the rent.
When your tenants signed the rental agreement, they almost certainly didn’t expect to see such huge rises in living expenses and so won’t have budgeted for them. Many landlords appreciate this and so we’re seeing slower growth in rental rates – a forecasted 4.5% in 2022-2023 compared to 7.5% in 2021-2022, according to Zoopla.
If you’ve got a great set of tenants who always pay on time, look after your property and aren’t planning to move any time soon, then is it worth the risk of losing them because of a rent hike?
The answer is probably not, especially as you might find it harder than before to find new tenants at the increased rate. There’s also the costs of advertising and vetting new tenants. Sometimes, it’s better to stick with the status quo for a little longer.
