Four in 10 landlords say they already increased rents over the past 12 months
One in three landlords plan to increase rents amid rising costs, according to the Deposit Protection Service (DPS).
A survey of more than 1,000 landlords by the DPS has revealed that three quarters, or 75%, of respondents planning to remain in buy-to let during the next few years had either increased rents during the past 12 months (40%) or were planning to do so in the near future (35%).
“Demand for rental property remains high, and our survey suggests most landlords see a future in the rental market,” said Matt Trevett (pictured), managing director at the Deposit Protection Service. “However, landlords have also told us that their costs have increased recently, particularly as a result of higher interest rates – and it seems a large proportion are raising rents to cover their expenses.
“Clearly, increases to interest rates and the cost of living will also be affecting some tenants, and we’d encourage both renters and landlords to have an open and constructive dialogue about financial pressures in the current economic climate.”
Meanwhile, the DPS survey also found that almost three quarters of landlords, or 72%, agreed that keeping rents in line with their local rental market was an influential or very influential factor in their decision to increase letting prices.
Around two thirds, or 68%, said that increasing costs relating to legislation and compliance were a key factor in their decision, with 62% mentioning increasing maintenance costs, and 55% saying rent rises were necessary because of increasing risks, such as the proposed abolition of no-fault evictions.
More than half, or 54%, said that the requirements of mortgage lenders, such as financial stress testing and affordability requirements, did not influence their decision, with 53% saying that increasing costs of letting agents did not affect their thinking either.
“It’s interesting to note that, although there is a perception that costs associated with securing a mortgage and using a letting agent have increased, most landlord survey respondents do not think those costs affected their decision to increase rents,” commented Paul Fryers, managing director at specialist buy-to-let lender Zephyr Homeloans.
“It seems interest rates and broad market pressures have been more decisive in the trend along with inflationary pressures on maintenance costs.”
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