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Introduction
It would be impossible not to be concerned or worried about finances at the moment in light of all the headlines about the 2022 cost of living crisis, the highest inflation for 40 years and spiralling monthly energy bills.
Some of the reports and statistics make for alarming reading, such as families with children spending £400 more per month, and almost 4.5million UK families finding themselves in financial difficulties.
And yet the situation looks set to only get worse as inflation continues to rise way above and beyond any growth in wages.
For landlords, the cost of living crisis is worrying on several fronts; in terms of protecting your investment for the sake of your own financial situation, and concern for your tenants.
We’ve put together this useful guide to help both you and your tenant during this current crisis.
Communication is key
The most important thing you can do is keep the lines of communication with your tenants open. If you’re aware of their situations, this may help avoid missed payments or conflict. If a tenant is struggling to pay, it could be that you’re willing to come to a workable solution together. It may also be incredibly helpful for a tenant to get some reassurance if they’re worrying about their finances.
It’s also worth familiarising yourself with any Government legislation or relief which may be available to your tenants so you can pass the information on. For example, there’s a new Help for Households website which aims to bring together all the various sources of support that may be available to people.
There’s also the Council Tax Reduction Scheme which could help single person households or those on low incomes. It reduces Council Tax by 25% for eligible recipients. Information on this is usually available from the relevant tax-collecting authority.
Making your rental property energy efficient
Obviously one of the biggest areas of concern at the moment is the rising cost of energy prices. While the tenants will likely pay the energy bills, anything you can do as a landlord to help mitigate that impact could help protect your rental income and future-proof your property too.
A good way to do this is by improving the energy rating of your property – the Government is proposing that all rental properties are rated C or above by 2025, so it’s worth looking into in any case.
Do you know the current EPC rating of your property? Lower ratings mean a home is less energy efficient, and therefore the energy bills will be higher. If your rating is low, it might be worth investigating the cost of improvements. Not only will this help your tenants pay their bills (including the rent!), it’s also a necessary long-term investment.
There are currently Green Homes grants available in Leicester which can pay for the cost of energy improvement works.
If you’re not too familiar with EPCs and how they work, this Government EPC guide may be useful.
There are many measures you can take to improve the energy efficiency of a property. Here are a few of our top tips:
Insulation
This could include wall, ceiling or floor insulation. According to the Energy Saving Trust, around a third of the heat lost in an uninsulated house escapes through the walls. Almost £300 per year could be saved on heating bills through wall insulation alone.
Smart meters
These allow people to see where they’re using the most energy in the home and how much it’s costing. It takes away the unpredictability of estimated billing so you only pay for what you use. For many smaller households it leads to an immediate reduction in bills. Smart meters are installed free of charge by energy companies.
LED lighting
Lighting makes up 11% of the average household electricity bill and switching to much more efficient LEDs could save an average £55 per year.
Energy efficient boiler
Heating and hot water makes up half of energy spending so the boiler does have a big impact on bills. Latest figures from the Energy Saving Trust report average savings upwards of 70% per year when replacing an old gas boiler with a new A-rated condensing boiler.
Sealing cracks or holes
Minimising any opportunities for the heat to escape or drafts to enter a property will improve its efficiency, so it’s worth keeping on top of those DIY jobs.
Installing double glazed window
Decent windows are integral to a warm home. Making doors and windows energy efficient (ie double or triple glazing) will reduce energy bills. Savings of around £145 per year are possible in the average gas-heated, semi-detached property.
*Prices above are all based on the April 2022 energy price cap.
In addition to the cost-saving benefits, there’s also the environmental benefits of lowering your carbon footprint through the above measures.
How Readings can help
There’s no escaping the fact that it’s going to be a difficult winter and we’ll all be looking for ways we can cut back on costs and make savings.
For landlords, you’ll have the added worry of protecting your tenants and your investment. But you don’t need to take on the burden alone, we’re here to help. The Readings team are experts in property management – we’ve worked in this sector for 85 years and there’s not much we haven’t seen in that time.
We’re here to discuss any situations or problems, and to help you weather the storm as safely as possible. Get in touch with us to find out more.
