The Deposit Protection Service is the latest part of the industry to try to quantify how many landlords are implementing rent rises in the face of increasing costs.
A study of 1,000 landlords found that three quarters of those planning to remain in buy-to let during the next few years have either increased rents during the past 12 months (40 per cent) or are planning to do so in the near future (35 per cent).
DPS managing director Matt Trevett says: “Demand for rental property remains high, and our survey suggests most landlords see a future in the rental market.
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.”
Almost three quarters of landlords 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; some 68 per cent said that increasing costs relating to legislation and compliance were a key factor in their decision, with 62 per cent mentioning increasing maintenance costs, and 55 per cent saying rent rises were necessary because of increasing risks.
Just over half said that the requirements of mortgage lenders, such as financial stress testing and affordability requirements, did not influence their decision, with 53 per cent saying that increasing costs of letting agents did not affect their thinking either.
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