Should landlords increase the rent?
76% of landlords have raised rents over past year – should you?
If you’re a UK landlord, are you unsure what to do once your mortgage payment increases? If so, you’re not alone.
According to research undertaken by Landbay, although 18% of 10 buy-to-let landlords said they would not raise rents for their tenants if their own mortgage rate increased when they come to remortgage, 21% were unsure what to do and 61% said they would raise the rent.
Over the past year,
- 76% of landlords said they raised the rent with the main reason, cited by half of them (51%), being to cover higher mortgage costs.
- A quarter of landlords (24%) said they raised rents on the advice of their letting agent.
- Other reasons were to cover maintenance and repairs, an increase in taxation or energy bills, while some landlords always raise rents once a year.
- The most likely rent increase, according to 38% of respondents, is between 6% and 10%, while 27% said they would only increase the rent by up to 5% maximum.
For those landlords who are currently not raising rents, they don’t need to as their rental income covers their mortgage and other outgoings. However, some said they are out of pocket but have taken the hit because they don’t want to lose good tenants. Meanwhile, others are delaying the rental increase for as long as they can.
Our mortgage expert, Ryan Radford said:
“Many landlords I’m talking to, whose mortgage payments are going up, find they have no alternative but to put the rent up to cover their costs.
“Mortgage costs obviously play a big part in landlords’ expenditure and there is a lot of remortgage activity this year. If your mortgage deal is coming to an end, my advice is always to speak to a whole of market mortgage adviser.
We can search for the best mortgage available from both the high street lenders and the smaller, specialist providers. For example, one of our contacts is offering a like-for-like two-year fixed rate remortgage, with affordability based on pay rate plus 1%, instead of the more usual 2%.”
The market is constantly changing, and our experts are ideally placed to hear about the latest product developments.
Registering your details with us will mean we can keep you in mind should a lender promote a new landlord mortgage that’s just right for you. We can also work through your figures to ensure your rent does cover the new mortgage payment.
Don’t forget, we’re conveniently located in Dubai so can meet face to face to discuss your individual needs.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.