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Most landlords plan to increase rents in next 12 months

Most landlords plan to increase rents in next 12 months
Shekina Tuahene
Written By:
Shekina Tuahene
Posted:
10/07/2024
Updated:
10/07/2024

The majority – 85% – of landlords plan to raise rents in the next year, a survey from a lender uncovered.

Of these, 36% wanted to increase rents by up to 5%, according to a poll conducted by Landbay. This is higher than the 27% of landlords who planned to raise rents by this much at the last survey carried out last year. 

Landbay found that 37% of landlords expected to increase rents by between 6% and 10%, which was similar to the 38% of respondents who said this in the last survey. Less than a tenth – 8% – of landlords will increase rents by between 11% and 19%. 

Among those planning to increase rents, 42% were landlords with portfolios of four to 10 properties. Some 28% who will be putting up the rent in the next 12 months had more than 20 properties. 

Landlords’ operational costs 

According to the poll, half of the landlords who took part managed their own properties or portfolios, while 27% relied on an estate agent. A fifth had their properties managed by a management company. 

Landbay found that higher interest rates influenced how landlords charged rent, but operational costs were also a key factor. 

Of the landlords increasing rents over the next year, 16% spend more than 13% of their rental income on property management. Less than a third – 30% – spend 5% of their rental income on this and 29% of landlords spend between 9% and 15% on managing their properties. 

Rob Stanton, sales and distribution director at Landbay, said: “Whereas before, rising rents would often reflect the increasing demand for good-quality rental accommodation, today’s market now means landlords also have to factor in higher interest rates and operating costs too. With no alternative, many landlords have to consider increasing rent to cover their outgoings. 

“As a large number of landlords look at their remortgage options, they can be encouraged by the innovation we have seen from lenders across the buy-to-let market. At Landbay, for example, we have just expanded our like-for-like remortgage range with new two-year fixed and tracker products – supported by new lower stress testing at just payrate.” 

“This change to affordability calculations is already proving popular and beneficial for both brokers and their clients,” he added. 

This article first appeared on our sister site, Mortgage Solutions, here.