Almost two in 10 (18%) of buy-to-let (BTL) landlords have said that they will not raise rents for their tenants if their own mortgage rate increases when they come to remortgage, Landbay has found.

The survey found that 61% of BTL landlords have said that they would raise their rents in this situation, with 21% unsure what they would do.

In the past year, Landbay found that that three-quarters (76%) of landlords said they have raised their rent, with over half (51%) citing that the main reason was to cover high mortgage costs. A quarter (24%) of landlords said they raised rents on the advice of their letting agent.

Other reasons included covering maintenance and repairs, an increase in taxation or energy bills, while some landlords always raise rents once a year.

The survey found that 38% of landlords were likely to increase their rents by between 6-10%, with 27% saying they would only raise rents by 5% maximum.

For the landlords that are not raising rents at this time, they do not need to as their rental income covers their mortgage and other outgoings.

However, some have said that they are out of pocket but have taken the hit because they don’t want to lose good tenants, with others delaying the rental increase for as long as they can.

Managing director for intermediaries at Landbay, Paul Brett, said: “Many landlords, whose mortgage interest rates are increasing, find themselves in the position of having no alternative than to put the rent up in order to cover their outgoings.

“Mortgage costs obviously play a big part in landlords’ expenditure and there is a lot of remortgage activity this year. Our latest product development of like-for-like two-year fixed rate remortgages will help landlords, as the stress test we have to apply for affordability is based on pay rate plus 1%, instead of the more usual 2%.

“In fact, we are seeing more landlords opting for two-year terms, which is why we have also launched two-year discounted trackers with no early repayment charges. Borrowers can leave their options open with the opportunity to move onto another product at any time if mortgage rates improve.”

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