How will rising inflation impact buy-to-let landlords?


With experts forecasting inflation to rise above 8% this year, we’ve polled hundreds of UK buy-to-let landlords to assess the likely impact on their property investments. 

How concerned are landlords? Where do they expect to feel the impact most? And crucially, will it drive a substantial change in their investment behaviour? Our five most important findings, summarised below: 

1. The cost of investing in property is increasing…

GetGround research showed that four in five UK landlords (83%) surveyed were ‘concerned or very concerned’ that rising inflation will negatively impact their ability to continue to invest profitably in UK rental property.

…with 90% expecting inflation to impact maintenance costs.

More than half (52%) of respondents expect the cost of managing their property investments to increase by 25% to 50%. One in ten of them expected costs to increase by more than 50%. Mortgage finance (52%), energy bills (52%) and insurance premiums (44%) are cited as the three aspects of property investment most likely to be impacted by inflation. Property management services were a close fourth (40%).

2. But it won’t drive substantial change in investment behaviour. 

Despite these challenges, less than three in ten landlords (29%) told us that they intended to reduce their property investment activity while inflation is high. Among the 71% who won’t downsize, 33% will continue as they are and make no changes, and a further quarter (24%) plan to increase their property investment activity. 

3. Almost 70% of landlords feel a responsibility to help their tenants as the cost of living rises.

The survey also revealed that 69% of landlords felt a responsibility to help their tenants mitigate the impact of the cost of living crisis on their lives. The most important actions landlords believed they can take to help tenants protect themselves against rising costs were: temporarily freezing rents (37% of landlords support this), making energy efficiency upgrades (35%) and agreeing longer tenancy durations (34%).

4. Other ‘inflation-beating assets’? Gold tops the list. 

When asked how they felt about property investment in the context of other so-called ‘inflation-beating’ assets, landlords remained confident. Gold and commodities were the most popular alternative ‘inflation-beating’ assets among landlords - with 26% and 22% of landlords investing in them respectively. Two in five (38%) UK landlords believed their property investments would outperform all other assets in the category. 

5. Analysis from GetGround

Despite the unprecedentedly high levels of inflation we’re expecting to see, our survey data strikingly affirms the enduring appeal of property investment. Long-term investment confidence is well founded.

Property only becomes a less attractive option if investors can find a better inflation-beating return from other assets. While rental demand remains high and house building figures stay low, landlords investing in the right areas will not only have a steady stream of tenants to rent to, but will benefit from positive value growth. 

While, like the rest of us, property investors aren’t immune to the impact of rising inflation, our research shows most UK landlords don’t want to pass that burden onto tenants, if they can help it. Instead they want to be accommodating to their tenants in ways that are meaningful and long-term, proving that blending longer-term thinking with empathy actually makes better business sense.

Read more from our survey findings via Mortgage Strategy, Property Reporter, The Intermediary and Landlord Zone.

This blog forms the first in a series of blogs we’ll be sharing with you about the sentiment of UK landlords towards inflation. Source: GetGround Poll of UK Landlords | Feb 2022.

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