Landlords increase rent to cope with higher mortgage costs

Landlords increase rent to cope with higher mortgage costs

0:03 AM, 6th December 2023, About 3 months ago 3

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The majority of buy to let landlords in the UK have increased rent in the past year, mainly to cover higher mortgage costs, a new survey reveals.

The findings from Landbay, which polled 1,000 landlords, revealed that 76% of them have raised rent over the past 12 months, with 51% citing mortgage payments as the main reason.

Another 20% said they followed the advice of their letting agent, while 8% attributed the rent rise to property maintenance, repairs and upgrades to improve the energy efficiency rating of their properties.

‘Landlords need to cover their costs’

Landbay’s sales and distribution director, Rob Stanton, said: “Higher mortgage rates when remortgaging is obviously a contributory factor to rent rises and is understandable as landlords need to cover their costs.

“For those landlords who haven’t or don’t intend to raise rent, it is generally because their mortgage costs are low, or they have long standing and/or good tenants they want to keep.”

The survey also asked landlords how much they would increase the rent by if they had to and 65% said they would opt for a rent increase of up to 10%, with 38% choosing a 6-10% increase.

There were 27% of landlords who said they would cap the limit at up to 5%.

Another 20% were unsure, while 10% of landlords said they would lift rent by more than 10% and 5% said they had no plans to raise rent.

What landlords would do if their mortgage rate goes up

The survey also asked landlords what they would do if their mortgage rate went up when they remortgage in the future.

The results showed that 71% of them said they would have to raise the rent again, while 21% were unsure and only 8% said they would not increase the rent just because of higher mortgage costs.

The survey also revealed regional variations in landlords’ responses and in the South (excluding London), 89% of landlords said they would raise rent if their mortgage rate went up.

That compares with 62% of landlords in the North, where 35% were unsure.

The Midlands has 78% of landlords saying they would have to increase rent, while London has 65% of landlords saying they would raise rent and 10% were unsure.


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Comments

TheBiggerPicture

10:17 AM, 6th December 2023, About 3 months ago

Removing fixed term tenancies removes tenant choice.

A landlord who can't be certain they will get a property back by a specific date, may choose not to rent it out.

The tenant who only needs short term tenancies may be forced to find other more expensive or inconvenient options.

Easy rider

20:47 PM, 6th December 2023, About 3 months ago

Increasing the rent by the rate of inflation should be counted as not increasing the rent. Increasing by less than inflation is a reduction in real terms.

Michael Booth

16:01 PM, 7th December 2023, About 3 months ago

Never increased my rent in 15 years that's correct 15 years , council starting to introduce selective licences at £500 a property have informed Tennants rent with be going up to cover costs.

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