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Landlords Essential for Local Economies, Research Suggests

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    Research Reveals How Much Landlords Boost Their Local Economy

    Landlords play a vital role in boosting local economies, whether employing local tradespeople or advertising properties with local estate agents.

    New research from Aldermore has highlighted how much of a financial boost landlords provide for their local economy.

    In a time when some landlords are considering downsizing due to uncertainty in the property market, it’s good to see that landlords are still regarded as essential to the private rental sector.

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      How Much Do Landlords Contribute to the Local Economy?

      According to the Aldermore study, almost 80% of landlords prefer hiring tradespeople near their rental properties, spending an average of £6,003 annually on local services. Landlords commonly seek local electricians (52%), plumbers (50%), and handymen (34%) to address ongoing maintenance issues in their rental properties.

      Moreover, landlords increasingly choose local professionals for a broader range of services. Approximately one in seven opt for local interior designers and structural engineers, with a similar proportion engaging local architects.

      Landlords primarily choose local services to support the local economy (37%). Additionally, one-third of landlords prefer local services due to trust, and nearly the same percentage values the more profound insight into the local area provided by local tradespeople, enabling better advice.

      Nearly 70% of landlords believe that the departure of private landlords from the market will negatively impact the quality of available properties. Similarly, an equivalent number of private renters consider the private rental sector crucial in meeting the UK’s housing demand.

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      How Did Experts React to Landlords’ Effect on Local Economies?

      Head of mortgages at Aldermore, Jon Cooper, says: “Amid a backdrop of ongoing market challenges – from high-interest rates through to regulation changes – some landlords are considering downsizing their portfolios. However, there will be plenty of larger-scale, professional landlords that will instead look to purchase more BTL properties. This should, over time, provide useful ballast to the private rental sector.

      “Landlords remain absolutely vital to addressing the UK’s housing demand. Our data shows they’re generous contributors to their local economies as well. Whilst they sometimes get a bad press, there are so many good landlords out there making a really positive difference.”

      It is important to note that many landlords worry about interest rates and inflation despite the UK economy’s resilient turnaround throughout 2023. The Bank of England has held interest rates at 5.25% since the summer, and forecasters predict that the MPC will reduce those rates three times by the end of the year. In addition, inflation has fallen to 4% since mid-2023. As a result, mortgage lenders are reducing rates, which has enticed buyers back to the market.

      In the early months of 2024, we have seen renewed activity among buyers and more properties available in the market. This has led to sellers accurately pricing their properties – by the end of 2023, sellers were reducing their property prices by as much as £7,000 to achieve a sale.

      It is also worth noting that Savills expect rental growth to reach 6% in 2024. While this is less than the rental growth of 9.7% in 2023 (as per Zoopla), forecasters do not expect prices to rise too much (if at all), meaning investors could achieve higher yields on their UK buy-to-let property.

      For my buy-to-let insights regarding specific UK cities and towns, check out some of our area guides, including:

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      Dale Barham

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      Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.