Inflation
Convert between nominal and real values, and test whether rent keeps pace.
Introduction
Who this is for: Investors assessing whether returns hold up in purchasing-power terms.
Why it matters: A fixed rent loses real value every year. Over a ten-year lease at 3% inflation, a rent that never rises is worth about 26% less at the end than at the start.
Typical scenario: A landlord on a 10-year lease with 5-yearly reviews checking real income erosion.
- Comparing a nominal return today against a real return elsewhere.
- Assuming an upward-only rent review protects against inflation — it only protects against falls.
- Forgetting that fixed-rate debt benefits from inflation while fixed income suffers.
Inputs
Values
years
Analysis
£75,000 growing at 0% for 10 years reaches £75,000 nominally, but only £55,807 in today's money at 3% inflation — a real change of -25.6%.
This analysis provides context, not financial advice. Consult a qualified adviser before making investment decisions.
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Sensitivity
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Live Results
Nominal Value in Future
£75,000
Real Value (today’s money)
£55,807
Purchasing Power Lost
£19,193
Real Growth Rate
-2.91%