Rent increase – tenant won’t pay?

Reply to the comment left by SteveFowkes at 15/04/2023 – 14:17
That’s a bit harsh. I doubt if there are many landlords who five or ten years ago would have stress tested their portfolio against mortgage rates of 8.5%.

Reply to the comment left by SteveFowkes at 15/04/2023 – 14:17
I agree that landlords should always have a margin of safety when they borrow.

Following the Bank of England’s Stability Report in 2017, lenders are required to stress test mortgages at 3% above the rate at which fixed or capped rate loans will revert or 3% above the lender’s Standard Variable Rate (SVR). If the SVR of a lender is say 4.75% then the stress test might be conducted assuming a notional interest rate of 7.75%.
https://mortgagerequired.com/news/what-is-a-mortgage-stress-test

Let’s not forget that rates have risen 3.75% over the last 12 months, that’s an increase of 467% from March 2022.
https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp

8.5% was what TMW wanted to charge me on their SVR after my fix at 2.49% ended.

I had already locked in a fix with a replacement lender, before the “mini budget”, at 3.91% (57% increase).

As such, I had already hedged any increase for the next 5 years, deferring the need to stress test until Q4, 2027.

I was simply trying to highlight the point that not all landlords have managed to achieve a debt free portfolio, and that those who have had fixed rate deals they need to refinance over the last 6 months may have (had) to raise rents to cover a material increase in their biggest overhead.

Can we leave it there, and let this thread focus on Enina’s issues?

Reply to the comment left by SteveFowkes at 15/04/2023 – 14:17
Of course he stress tested it with a rent increase….same as the supermarkets!

Reply to the comment left by Rod at 15/04/2023 – 15:31
I have a debt free portfolio sand I put up my rents by on average 8.3% .. and I am still marginally below the rents for the area