In a recent survey by Landbay, a significant majority of buy-to-let landlords revealed their intentions to raise rents within the next year. The survey found that nearly 85% of landlords plan to increase rental prices, reflecting a notable shift in the market.

Of these, more than a third (36%) indicated plans to raise rents by up to 5%, up from 27% in Landbay’s 2023 survey. Meanwhile, 37% of landlords expect to hike rents by between 6 and 10%, a figure almost identical to last year’s 38%. A smaller fraction (8%) plans increases ranging from 11 to 19%.

The survey highlights that landlords with portfolios of 4-10 properties are the most likely to increase rents, comprising nearly half (42%) of those surveyed. This group is followed by landlords with 20 or more properties, who make up 28%. Management strategies also vary, with exactly half of the respondents self-managing their properties, while 27% use estate agents and 20% rely on professional management companies.

Rob Stanton, Landbay’s Director of Sales and Distribution, commented on the findings: “Whereas before, rising rents would often reflect the increasing demand for good quality rental accommodation, today’s market now means landlords also have to factor in higher interest rates and operating costs too. With no alternative, many landlords have to consider increasing rent to cover their outgoings.”

Stanton also noted that the buy-to-let market has seen innovative responses from lenders, citing Landbay’s expanded remortgage range with new two-year fixed and tracker products, supported by lower stress testing at just the payrate. “This change to affordability calculations is already proving popular and beneficial for both brokers and their clients,” he added.

The survey further revealed that operational costs are significantly impacting landlords’ decisions. Over 16% of those planning rent hikes reported spending more than 13% of their rental income on property management. Nearly a third (30%) allocate 5% of their rental income to these costs, while 29% spend between 9 and 12%.

These insights from Landbay’s comprehensive survey of over 1,500 landlords shed light on the current challenges and strategic decisions facing the buy-to-let market as landlords navigate higher costs and regulatory changes.