In property, there has certainly been many positives coming out of the last 12 months for landlords, with rents up more than 11% compared to last year and house prices still rising, despite the rate of growth starting to slow.
However, the rate of inflation has already surpassed the average buy-to-let yield of 5.5% and with the Bank of England base rate now 1.75%, with further rises on the horizon, the cost of investing in and managing a property portfolio is higher than it has been in decades.
It begs the question, is buy-to-let still a viable investment vehicle, particularly when the government seems intent on bringing in more legislation that only deters the supply of rental stock rather than encourage it?
For premium franchise, Platinum Property Partners (PPP), it certainly is. As many businesses struggle through the economic uncertainty, the PPP property investment model remains a solid business opportunity, supported by a head office team and infrastructure that have already weathered some of the biggest challenges in the private rented sector in recent history.
For those looking for a robust franchise that can provide a lifelong income and the added bonus of capital growth over the long-term, PPP provides inflation busting returns.
Protecting profit margins
For landlords within the PPP franchise, the impact of the rising cost of living and running a property business has not been without its challenges.
The network, which supplies high quality shared accommodation, also known as Houses in Multiple Occupation (HMOs) to young professionals, has seen mortgage interest payments rise as well as energy bills.
With the recent announcement by Ofgem that typical energy bills are to rise to £3,549 per year, this will significantly increase the cost of running HMOs, which are rented to tenants inclusive of bills.
Yet the franchise, which is celebrating its 15th year in business in 2022, is not overly concerned due to the robustness of their tried and tested investment model.
“Our HMO model generates up to four times as much rental income as a single occupancy buy-to-let”, says Emma Hayes, Managing Director. “It was designed to maximise rental income that provides franchise partners with a sufficient buffer against the ever-changing running costs of a property portfolio whilst providing much needed and affordable accommodation to tenants.”
