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Majority of landlords planning rent rise

As many as 85% of buy-to-let landlords are planning to increase their rents over the coming twelve months as they plan to cope with higher mortgage interest rates and operating costs, according to a survey from Landbay. Just over a third (36%), are planning to increase rents by up to 5%, while 37% intent to increase rents between 6 and 10%. Just under a tenth (8%) are planning for larger increases, between 11 and 19%.

“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,” Rob Stanton, sales and distribution director at Landbay, said. “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 the main force behind the increases in rent. Of the landlords planning to raise rents over the coming year, nearly a fifth (16%) are paying in the excess of 13% of their rental income on property management. Just under a third (30%) are paying 5% of their rental income while just under three in ten (29%) find themselves paying between 9 and 12%.

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