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Three in four buy-to-let landlords – 76% – have increased rent over the past year with the main reason being to cover higher mortgage costs, the latest Landbay survey shows.
More than half of landlords – 51% – cited mortgage payments and 20% said their letting agent had advised them to raise the rent. The study also revealed that property maintenance, repairs and upgraded work to improve an EPC rating were the reasons given by 8% of landlords.
In addition, the research found that if their mortgage rate goes up when they remortgage in the future, 71% of landlords said they would have to raise the rent and 21% were unsure. Just 8% said they would not increase the rent just because of higher mortgage costs.
On a regional basis, 89% of landlords in the South (excluding London) would raise rent compared to 62% in the North, although 35% here were unsure what they would do.
The Midlands sits between the North and the South with 78% of landlords saying they would have to increase rent. London is at the lower end where 65% of landlords said they would raise rent with 10% unsure.
If rent increases are on the cards, 65% would opt for putting up the monthly payments by up to 10%. This is broken down into 38% of landlords raising rents by 6-10% and 27% choosing to cap the limit at up to 5%. A further 20% were unsure, while 10% of landlords would lift rent by more than 10% and 5% said they don’t plan to raise rent.
Rob Stanton, sales and distribution director at Landbay, 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.”
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