Three in four buy-to-let landlords (76%) have raised rent over the past year with the main reason being to cover higher mortgage costs, according to the latest Landbay survey.
Over half of landlords (51%) cited mortgage payments and 20% said their letting agent had advised them to raise the rent. Property maintenance, repairs and upgraded work to improve an EPC rating were the reasons given by 8% of landlords.
If the 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.
Landbay sales and distribution director Rob Stanton comments: “Higher mortgage rates when remortgaging is obviously a contributory factor to rent rises and is understandable as landlords need to cover their costs”.
He adds: “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.”
