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Majority of landlords plan to raise rents

Nearly 85% of buy-to-let landlords plan to raise rents in the coming 12 months as they look to cope with higher mortgage interest rates and operating costs, Landbay’s survey has revealed.

A third (36%) plan to raise rents by up to 5%, 37% intend to increase rents between 6 and 10%, while one in 10 (8%) want to opt for a big increase between 11 and 19%.

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.”

Higher operating costs are driving rent increases.

Of the landlords set to raise rents this coming year, more than one in ten (16%) pay in excess of 13% of their rental income on property management.

Just under a third (30%) pay 5% of their rental income, while slightly less again (29%) pay between 9 and 12%.

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