Tenants on alert as most landlords plan rent rises to cover mortgage costs
According to buy-to-let lender Landbay’s quarterly landlord survey, 44% of those who expect to increase rents to account for higher mortgage costs in the next 12 months will raise them by between 6% and 10%.
Meanwhile, 70% of landlords planning to put their rents up will do so for new and existing tenants.
The survey found that 19% of landlords were unsure about their plans while 13% did not want to increase rent. The main reasons for not wanting to put rent up included already strong rental yields and not wanting to lose good tenants.
‘Landlords face a rate shock’
Paul Brett, managing director, intermediaries at Landbay said: “While there’s no question mortgage rates have steadily improved in recent months, many landlords will still see a clear disparity when they come to remortgage.
“Much like private borrowers, landlords face a rate shock too, and for some, the only possible course of action is to pass this on to the tenant.
“However, with many of our respondents still reporting strong rental yields, there’s hope that landlords will be less inclined to raise rent. That’s especially true for those not looking to upset loyal and trusted tenants.
“Nonetheless, it’s certainly a challenging time in the buy-to-let market and as part of our duty to our clients, we are always reviewing our product range and looking at ways to deliver a competitive advantage.”