Almost two out of three landlords, or 62%, say they are likely to raise rents by at least 10% over the next 12 months, data from Aldermore shows.
A poll by the challenger bank adds that 49% of buy-to-let owners feel that “it’s harder being a landlord now compared to a year ago”, faced with inflation at 10.7%, interest rates at 3.5% and a volatile housing market.
Its study finds that although a sizeable majority of BTL owners are considering raising rents they are “conflicted about passing on costs in an already difficult climate”, with 64% worried that tenants may not be able to pay their rent in the near future because of the rising cost-of-living.
The poll says that 48% of BTL owners were unable to expand their property portfolio over the last year, while 42% will consider downsizing their holdings if market conditions continue.
In a bid to maximise returns in the current environment, 42% of landlords say if they were to expand their portfolio, they would buy as a limited company.
To make their properties more sustainable and meet government energy performance certificate regulations, 53% of BTL owners plan to carry out upgrades over the next 12 months to improve the energy efficiency of their buildings.
However, the survey presents a varied picture, with 54% still feeling “optimistic about the future”, with 66% adding that “being a landlord remains a good way to make money”.
Aldermore head of mortgages Jon Cooper says: “2022 was marked by troubling developments to the economy and the property market has faced some significant challenges.
“With the cost-of-living crisis already impacting tenants, homeowners and landlords alike, the outlook for 2023 seems tricky to predict.
“However, there remain healthy and positive opportunities for landlords in the UK. As we head into 2023, landlords should work closely with their brokers to assess their portfolios and identify opportunities that lie ahead.”
Aldermore’s poll was carried out by data group Opinium between 23 November and 7 December among 500 UK Landlords.
