Most landlords will put up rent to meet rising mortgage costs

Most landlords will put up rent to meet rising mortgage costs

0:01 AM, 1st February 2023, About 2 years ago 2

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With the Bank of England set to put up its base rate this week, one firm is warning that landlords will put up rents if the base rate reaches 4.5%.

The bridging finance broker Finbri says that with the base rate expected to reach a high of 4.5% in 2023, 53% of landlords will look to raise rents to cover their increased costs.

And, faced with rising bills and the prospect of voids during the cost-of-living crisis, 45% say they would sell up or reduce their portfolio size in the face of an interest rate hike.

‘Not surprising that landlords are looking to increase rents’

The firm’s Stephen Clark said: “The base rate is directly linked to the cost of borrowing, so it’s not surprising that landlords are looking to increase rents.

“It’s not just tenants who may be affected by rent increases if interest rates continue to climb.

“The UK housing market as a whole could experience further undersupply and combined with a recession looming, there is the growing risk of a property market crash.”

‘45% would look to sell their investment properties’

He added: “With the base rate expected to reach 4.5% this year, 45% of landlords would consider alternative investments, whilst 45% would look to sell their investment properties.

“However, despite the looming impact of increasing rates on landlords, our research shows that 45% are planning to invest in property this year.”

The survey of more than 1,000 UK landlords also reveals that many are worried about the impact of rising inflation.

And with inflation at a 40-year high, 52% of landlords are ‘strongly concerned’ or ‘concerned’ about it.

Prospect of potential EPC legislation

Landlords are also worried about the prospect of potential EPC legislation with a proposal for rented homes to have a minimum rating of ‘C’ by 2025.

Finbri says that 46% of landlords are ‘strongly concerned’ or ‘concerned’ about the legislation and the potential of the how much it will cost to meet the proposed standard.

There is also a growing among landlords that a property market crash will occur to hit house prices.

Concerns about the potential impact of a property crash

The survey found that 45% of landlords are ‘concerned’ or ‘strongly concerned’ about the potential impact of a property crash.

Despite this, 36% of landlords say they are ‘optimistic’ or ‘very optimistic’ with some saying that if prices fall by at least 8% this year, there will be investment opportunities.


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Reluctant Landlord

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16:30 PM, 1st February 2023, About 2 years ago

already put mine up a months back with links to apply for DHP for benefit tenants.

it really isn't my issue if LHA remains frozen AND does not meet the average local rent levels in the area. Even with an increases I still charge BELOW the average!

Tenant will have to apply to council, and council get funding from gvt if tenant cant afford top ups. The way I see it is that the LA ultimately will have to pay unless they want the tenant back in temp accommodation (which they don't have and of and use hotels etc so costing 4 times as much!).

One tenant I spoke to today completely understands and says he's on 'my side'.

Maybe all LL's should make this position clear to all tenants and let them start kicking off at their MPs/Shelter etc....

I AM NOT a charity or a state housing provider!

Reluctant Landlord

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16:47 PM, 1st February 2023, About 2 years ago

if my mortgage costs increase then so do the rents. If any tenant had their own property and a mortgage they would not be immune so how do they think that I am?

LL's work on known/forseeable factors and should work in a variance on mortgages fluctuations etc. Anything outside of this is regarded as a risk - same with anything and the most appropriate action is taken at the time to get back onto an even keel. Where the risk/issue progresses beyond this tolerance level then each LL has to make a decision on a scale that's personal to them. Some increase rent, some sell. It is how it is.

A farmer produces an apple. He sells it to Tesco. Tesco sell it to the customer.
Farmer puts the price up, Tesco will inevitably put the price up and so the price to the customer goes up.
If the customer feels the price is too high they don't pay it, or pick a cheaper fruit instead. Choice.

The Farmer cannot dictate the availability of the rest of the fruit selection, only sell an apple at the price he can afford to produce/make a profit on.

Why are LL's and private housing seen as something entirely different??

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