Majority say they increased their rent to cover higher mortgage costs
Around three in four landlords, or 76%, have raised rent over the past year, new research from buy-to-let lender Landbay has found.
The majority of landlords, or 51%, said they increased their rent to cover higher mortgage costs, while one in five, or 20%, said their letting agent had advised them to do so.
Property maintenance, repairs and upgraded work to improve the property’s energy performance certificate (EPC) rating were the reasons given by 8% of landlords for raising rents.
The Landbay survey also revealed that seven in 10 landlords, or 71%, said they would have to raise the rent if their mortgage rate goes up when they remortgage in the future. Around 21% were unsure, and just 8% said they would not increase the rent just because of higher mortgage costs.
Regionally, 89% of landlords in the south, excluding London, would raise rent compared to 62% in the north, although 35% there were unsure what they would do. In the Midlands, 78% of landlords said they would have to increase rent, while London is at the lower end, where 65% of landlords said they would raise rent with 10% unsure.
If ever they would have to increase rents, 65% of landlords would opt for putting up the monthly payments by 10%, with 38% raising rents by 6 to 10% and 27% choosing to cap the limit at up to 5%. A further 20% were unsure, while 10% of landlords would increase rent by more than 10%, and 5% said they would not raise rent.
“Higher mortgage rates when remortgaging is obviously a contributory factor to rent rises and is understandable as landlords need to cover their costs,” commented Rob Stanton (pictured), sales and distribution director at Landbay.
“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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