Half of landlords have upped rents citing affordability pressures

A survey from business and landlord insurance provider Superscript showed the affordability pressures mortgaged landlords are under, with seven out of ten citing rising home loans as the driver to act.

In September, the Bank of England’s Monetary Policy Committee (MPC) raised the interest rate by 0.5 per cent to 2.25 per cent, the seventh time in a row the rate has risen, matching the largest rate hike seen in August when it was also upped by 0.5 per cent to 1.75 per cent.

With more than half a million landlords already facing rent arrears in August due to a combination of the cost of living crisis and the collapse of housing support for tenants, this represents an affordability crisis for landlords across the UK.

Rates rise, landlords fall

According to the survey, 58 per cent said they will have to seriously consider selling their leased property (or properties) should interest rates increase further.

Despite the financial pressures, landlords – 37 per cent of which can be said to be ‘accidental’, or became a landlord due to unexpected circumstances – say they are willing to work with tenants.

Half of landlords surveyed indicated they would consider freezing rent should the tenants request to do so due to financial strains. Indeed, recent research by Shawbrook Bank suggested that one in twelve tenants have already had their rent reduced.

Cameron Shearer, CEO and co-founder of Superscript, said: “Landlords, like everyone else, are feeling the squeeze of the cost of living crisis. While Superscript’s research shows that a large majority of landlords are willing to help their tenants in the short term with rent freezes or reductions, this is not financially sustainable for most landlords.

“If mortgage rates climb too high, many will have to confront the choice of last resort, either increasing rents or selling property. With a shortage of rental supply, neither of these choices benefits the housing ecosystem, in which responsible landlords are a crucial and undervalued element.”