Positive outlook for landlords despite new concerns

48% of landlords think new legislation and regulation is the biggest challenge they currently face, closely followed by increased maintenance costs
However, 49% feel positive about the future of being a landlord and over half enjoy it
Despite a tricky year, two thirds (66%) of landlords still think being a landlord is profitable

Half of landlords are positive about the future, but new regulations, such as tax changes, are causing concern, according to new research from AXA UK.

A survey of 1,000 UK landlords, which looked at the opportunities and challenges they face following the COVID-19 pandemic, revealed 48% perceive new legislation and regulation to be the biggest challenge, closely followed by increased maintenance costs (42%).

Of this legislation, electrical safety measure checks (34%) and tax changes (30%) present the biggest concerns. Although some of this legislation aims to provide increased safety and security for residents, it will potentially result in additional administration and cost for landlords, who may have limited support to implement the changes.

However, despite a tricky year, two thirds (66%) of landlords still think being a landlord is profitable, and over half (56%) enjoy being a landlord. Views of the future are bright, with 49% feeling positive and 31% feeling neutral, leaving only 20% feeling negative. For over two fifths (both 43%) steady income and having a long-term investment for the future are considered the top benefits of being a landlord. In particular, female landlords are more likely to view their rental portfolio as a long-term investment (49% vs 40% of men), while those aged 55 and over are more interested in the steady income than younger landlords (54% among those aged 55 plus and 24% among those aged 18- 34).

Looking back at the last 18 months, the main challenge landlords faced was tenants not being able to afford rent (26%), with this increasing to 42% with landlords under the age of 35. This was followed by a fifth (22%) saying it was not being able to access the property due to COVID-19 restrictions. Almost half (46%) say the pandemic has changed their business decisions and impacted their income, this compares to only 35% who said the same for the stamp duty holiday.

When it comes to insurance, nearly three quarters (72%) say that finding the correct insurance was an important decision for their business and eight in 10 (80%) say that insurance gives them peace of mind. The importance of insurance is highlighted when looking at the common disputes landlords have with their tenants; 29% say that damage to the property is the most common issue, matched only by paying rent on time (also 29%). A further 23% mention building or property issues (such as water leaks) and 18% breakages around the property.

These findings show the particular challenges being faced by landlords currently but also the positive outlook the majority have to what they do. It’s encouraging to learn that despite these challenges, they are still reaping the rewards of a profitable business and will continue to grow their portfolios.

It is also reassuring to see how many landlords value the insurance they have and the peace of mind it gives them. Insurers should look to make it easy for landlords to find a policy that’s right for them and support them in growing their business.

Deepak Soni, Director of Commercial, AXA UK

Research carried out online by Opinium on behalf of AXA between 17 to 27 September, among a national poll of 1,000 UK landlords.

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About AXA UK

AXA Insurance UK plc registered in England and Wales under registered number 078950 and authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the Financial Conduct Authority under Financial Conduct Authority registration number 202312. Registered office is 20 Gracechurch Street, London, EC3V 0BG.

AXA UK is part of the AXA Group, a worldwide leader in insurance and asset management, with 147,000 employees serving 94 million clients in 50 countries. In 2023, IFRS revenues amounted to Euro 102.7 billion and underlying earnings to Euro 7.6 billion. AXA had Euro 844 billion in assets under management as of December 31, 2023.

In the UK & Ireland, AXA operates through a number of business units including: AXA Insurance, AXA Health and AXA Ireland. AXA UK & Ireland employs around 10,000 staff.

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AXA research shows a positive outlook for landlords despite concerns about new legislation