The Cost of Living Crisis: The Impact on Landlords

The cost of living crisis has gripped the nation since late 2021, and the drop in living standards has impacted all of us in one way or another. In fact, in January 2023, 92% of households in the UK had seen a rise in their cost of living compared to the previous year, with 67% of households reporting a monthly increase in their costs. With much of the media focus on the impact of the crisis on renters, let’s look at how the current climate is affecting landlords too.

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Rising living costs

As the cost of living crisis continues, it’s becoming more difficult for landlords to continue to profit from their investments. Although landlords may be sympathetic to the impact of soaring living costs on their tenants, they are also at risk of finding themselves under greater financial pressure as a result.

Coming to the end of a fixed rate buy-to-let mortgage may mean it’s necessary for landlords to increase the rent on a property. The problem is, if the tenants are already struggling to make ends meet this comes with the risk of them falling into arrears.

Gas prices are continuing to rise at record rates3, leaving landlords whose monthly rent includes a set sum to cover bills – such as those letting student properties - in a vulnerable position. Under a bills-included contract, a property’s landlord is responsible for paying the utility bills such as council tax, gas and electric using an agreed amount incorporated with the rent each month.

As bills continue to spiral, landlords tied into bills-included contracts may need to rely on the £400 grant available from the government. But what happens if the tenants of a property run up energy bills that exceed the grants available for the bill payer? Increasing the energy efficiency of the property portfolio may help landlords to keep their bills to a minimum, but it’s a long-term solution to a very immediate problem. 

Under new legislation on EPC certificates, landlords must achieve a rating of C or above for rental properties by 2025, adding to the financial pressures landlords face over the coming years.

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The impact on rental properties

Landlords place the day-to-day care of their rental property in the hands of their tenants. Unfortunately, the cost of living crisis could lead to even the most well-intentioned tenants causing inadvertent damage to their properties. National Energy Action estimates that 6.7 million families are now in fuel poverty4, forcing many tenants to leave the heating off to save money.

Leaving the heating in a home off for prolonged periods can lead to problems like damp and mould, and landlords have a legal responsibility to ensure their rental properties are free from both.

Tighter household budgets may also make it more challenging for tenants to make minor repairs where they’re contracted to. Over time, this could lead to a decline in the upkeep of rental properties, leaving landlords with more maintenance to cover when a tenancy comes to an end.

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Cost of living support for landlords and tenants

The good news is that there is currently support available to help landlords and their tenants navigate the cost of living crisis. The Energy Bills Support Scheme offers a total of £400 towards energy bills for all households, which will help to cushion the blow of rising costs for bill payers. The Warm Home Discount Scheme, Cost of Living Payments, the Cold Weather and Winter Fuel payments can also help to support those who are eligible for them.

It’s a good idea for landlords to communicate clearly with their tenants to ensure they’re receiving any help they’re entitled to throughout the crisis.

In fact, establishing a transparent relationship and checking in with tenants regularly can help landlords and their tenants to work together through times of financial strain, avoiding situations like rent arrears escalating.

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Landlords insurance from Towergate

We provide landlord insurance for a wide range of properties and tenants including multi occupancy, students, local authority placements, unoccupied and much more. See our landlord insurance page or call 0333 060 0915 for more.

Note: Every effort has been made to ensure the above information is correct at the time of this article going online, however, we recommend that you seek professional advice if required.

This is a marketing article by Towergate Insurance. 


1: Cost of Living Crisis in the UK – Statistics and Facts

2: Cost of Living Crisis in the UK – Statistics and Facts

3: Cost of Living Insights – energy

4:  Energy Crisis

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About the author

Alison Wild Bcom Hons MAAT MATT Taxation Technician Commercial Tax Pensions Insurance And Marketing Specialist AuthorAlison Wild BCom (Hons), MAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has 20 years' experience as a residential landlord.