Buy-to-Let Inflation Affect on Maintenance and Management

Management tends to be labour intensive, and consequently we might expect costs to rise with earnings. Against this there are savings to be made through efficiencies, which in recent years have included using the internet to find tenants.
In their business plans and financial appraisals, social housing providers most commonly forecast management costs rising between ½% and 1% above inflation.

Maintenance costs are more variable. There was a period in the nineties where skilled labour shortages in the building trades caused a rapid rise in maintenance costs, which only came to an end as a result of the influx of skilled workers from Eastern Europe.
In their appraisals and business plans it is quite common for social housing providers to project maintenance costs rising between ½% and 1% above CPI, just like management.

But according to figures from the global accounts of housing associations published by Social Housing magazine, both management and maintenance have more or less kept pace with changes in the CPI since 2006.

There are no published statistics on which to assess the way inflation impacts on the maintenance costs experienced by small landlords.

%d bloggers like this: