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Faced with sky-high energy bills, almost a quarter of adults are struggling to keep warm this winter, new research has revealed.

The cost of living crisis is one of the most pressing issues facing people across the UK right now. With inflation rising, wages stagnating and the cost of basic necessities increasing, it is becoming increasingly difficult for people to make ends meet.

This is having a massive impact on the housing market, and it’s important to understand the full extent of the crisis and the strategies that can be implemented to address it.

According to data compiled by the Office for National Statistics (ONS), taken from a survey of 4,962 households, almost a quarter (23%) said they were “occasionally, hardly ever, or never able” to keep warm at home.

The research conducted by the ONS at the tail end of last year revealed that 63% of people said they were cutting their gas and electricity usage due to the cost of living crisis. Almost every respondent (96%) admitted to using less heating.

Coupled with inflation, rising costs and increased lending rates, it paints a grim picture of the housing market in its present state.

The residential property industry is relied on by many, not just as a source of income, but as security and shelter, so how is the cost of living making things worse for tenants and homeowners?

cost of living keeping warm
Photographer: Arthur Lambillotte | Source: Unsplash

The low interest problem

The property market has been overheated of late, and this was especially true during the pandemic when property prices saw annual growth of more than 10%.

Although house prices are still high by historical standards – increasing by 60% over the last decade – property prices have started to fall month on month. Experts now fear a property market crash will have far-reaching implications for everyone, not just homeowners and tenants, but also those who work in the industry.

This is all compounded by the cost of living crisis, which itself was a result of a perfect storm of market forces, such as increasing wholesale energy prices and a cold winter with low gas supplies following the pandemic.

Many in the industry say that since the pandemic, low interest rates have been propping up the housing market. After all, it’s easier to afford a mortgage if the borrowing rate is cheap, relatively speaking.

However, the Bank of England’s base rate increases in response to rising inflation have now led to much higher mortgage rates. Because it’s now more expensive to borrow, prices are tanking. With supply and demand so imbalanced, the housing market is starting to feel the bite.

The role of agents during the cost of living crisis

The ongoing cost of living crisis has hit people’s finances, putting considerable strain on household budgets for renters and homeowners.

As a direct result, more people are putting off buying a home, waiting to see if market conditions turn more favourable for them. Renters are also feeling the pinch. Generation Rent, a campaign organisation for private renters, says that half have faced a rent increase in the last year.

Agents will have a part to play in the unfolding cost of living crisis, as they interact daily with the tenants and landlords.

With such inextricable forces at work, landlords will now look to their agents for crucial guidance at an unsettling time for many. For agents, it is important to understand the full extent of the crisis and the strategies that can be implemented to address it.

As landlords look to further protect their property investment, they will need to know how to advise their tenants of any changes, as well as if there are any further protections for them, such as rent protection.

cost of living impact for agents
The first thing an agency should think about is to make sure that information gathering is a priority.

With so much uncertainty around at the moment and tenants concerned about the cost of living crisis, an agency that identifies vulnerable tenants – similar to how many estate agents tackled the challenges of the pandemic – will be much better prepared for any changes that may come along.

This could take the form of a questionnaire, or a much simpler information-gathering exercise, where agents can gather some feedback on their tenants’ current situation, so they’re ready to settle any nerves and avoid any unwanted void periods.

Another way to build confidence for both the landlord and the tenant is by conducting interim inspections as a way of ensuring both parties are living up to their obligations as set out in the contract. Interim inspections are a vital part of effective property management, helping landlords retain tenants or boost the value of their property if it is maintained to a high standard.

Additionally, when it comes to the end of a tenancy, having that auditable record of inspections can help resolve any issues between the tenant and the landlord, and not just the typical inventory report from the outset, but the ongoing maintenance inspections and check-out inspections, too.

Fuel poverty is a very real threat, too. This can have a knock-on implication for rent payments, so landlords will be much more confident in an agent with this information to hand and the ways and means of supporting them through this unsettling time.

When it comes to rent reviews, again it’s important to have any information freely available so that costs can be calculated correctly. A tenant in good standing might be more prepared for the inevitable rent increase than one who isn’t.

In addition to this, it might be advisable for agents to help their landlords reexamine their mortgage deal. If there are savings out there, or they’re approaching the end of their current deal, it might help stave off an unnecessary rent increase and mitigate the risk of loss.

As was the case during the pandemic, agents and others working at the coalface will yet again be confronted with challenges. Tenants and homeowners are bracing themselves for further costs, so property professionals need to be agile and equipped to deal with the hurdles that lay ahead.