Almost seven in 10 landlords (68%) are planning to increase rents if their mortgage rates goes up when remortgaging, revealed the latest Landbay quarterly survey data.
Only 13% of the landlords which participated in the study said no to any increases, as a result of strong rental yields, as well as their desire to keep hold of good, long-standing existing tenants.
Meanwhile, 19% of respondents were still unsure about their plans.
Of those who intent to up their rents, 70% have confirmed they will do so for both new and existing tenants.
According to the data, 44% of landlords expect to hike their rents by 6-10% in the coming 12 months, if their mortgage rate increases.
The survey results come on the back of the latest ONS data, which revealed that private rental prices paid by tenants in the UK rose by 4.4% in the 12 months to January 2023, up from 4.2% in December 2022.
Paul Brett, managing director for intermediaries at Landbay (pictured above), 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 BTL 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.
“The rental sector plays an essential role in the wider housing mix in the UK — landlords selling properties does no good for our housing sector as a whole, especially when demand continues to outstrip supply and high mortgage rates continue to push many to rent rather than buy.”
