Updated: May 24
The BBC has reported this week that inflation in the UK has now reached 7%, the highest in 30 years. Having grown up in the 70s and 80s, I remember what it was like living in a high inflationary environment, where the cost of everything keeps rising. The full effects of this have not yet been felt across the UK, and I've switched to 'inflation management' mode for Smith Lettings.
So, how am I managing inflation across the Smith Lettings portfolio?
First of all, from the perspective of our renters, the biggest impact is on household heating bills where, according to the BBC, average annual bills have jumped from 1 £1,277 to £1,971 - an average increase of £693 - from 1 April. During the course of March I replaced all of the standard heating thermostats in our houses to the Google Nest Learning Thermostat. These are great as they enable you to adjust the thermostat remotely, and it also automatically adjusts to eco settings when it senses no-one is home. This should save our rents a lot on heating bills, as well as being good for the environment. Feedback from our renters has been great, not least because it's easy to see and use!
Secondly, in a high inflationary environment, the one certainty is that prices will continue to go up. Consequently, I've decided to bring forward big ticket investments in our properties. For instance, I have ordered new double-glazed UPVC windows for what we nickname 'Project Helena', the first property we bought in the St Luke's area of Maidstone, and I have just improved the insulation in the loft to the full 300mm and have had new carpet laid in the hall, stairs and landing.
Thirdly, we are in the purchase of purchasing a new house in the St Luke's area of Maidstone, which I'm calling Project Alice. Again, I've decided to front-end the investment, and am planning to install a new energy efficient boiler and Google Nest thermostat straight away, as the boiler is likely to need replacing in the next few years anyway.
Finally, I'm going to try to keep costs down to effectively pay for this new boiler when we let Project Alice by saving money on the cost of letting, by doing it myself via Openrent, rather than via a lettings agency. I'm excited about this as it will help me to create a closer relationship with our tenants if all contact is with me. Watch this space!
Let me know your thoughts!
PS for an explanation of our project names, here is a link to my post on project names on our Instagram page