LATEST: Landlords raise rents and sell properties as costs rise
Almost three in five (60%) small portfolio landlords are preparing to increase rents to compensate for higher costs, while a fifth plan to sell some of their properties to directly combat the cost-of-living crisis.
A third of these landlords are looking for ways to make their properties more energy-efficient to address rising fuel bills, finds new research from Handelsbanken, which believes tenants could be impacted by any belt-tightening as a quarter of landlords say the economic climate will affect their maintenance and refurb programmes.
More than a fifth of portfolio landlords have had at least one mortgage deal fall through, with 40% reporting that their lender has increased the loan rate on one or more properties.
Stamp duty
As a result, 45% are planning to buy lower-value properties to remain under the stamp duty land tax threshold.
The study also shows that more than a third (34%) are cutting back on buying properties in cities as the market adjusts to more people working from home.
James Sproule (pictured), UK chief economist at Handelsbanken, says falling house prices in some areas and a rising regulatory burden are being viewed by some landlords as a reason to reduce their exposure to the market.
“While the ongoing cost-of-living crisis might be seen as the driving factor in the buy-to-let market, equally important are the post-pandemic movement back into cities, potential buyers delaying purchases and thus looking to rent, and fewer properties, meaning those who do persevere, are likely to see higher yields,” he adds.
