Landlords are facing higher mortgage repayments after the Reserve Bank lifted the cash rate for the first time since 2010.

But what does that mean for renters?

The idea that a landlord would seek to offset their higher home loan costs by charging higher rent sounds like a reasonable one.

But property professionals told The New Daily landlords set their rents based on market conditions and not on changes to their personal financial circumstances.

Plus, they’re also subject to tenancy laws that restrict how often they can increase their rent.

Better Renting executive director Joel Dignam said landlords charge as much rent as possible based on the advice of their property managers.

He said this means rents are already so high that landlords have little room to take them higher.

‘Maximise what they can get’

“Landlords are already charging as much as they can independent of their own costs, and so we’re not concerned that [interest rate hikes] would mean higher rents,” he said.

Mr Dignam told The New Daily that if landlords set rents according to changes in their personal financial circumstances, then we would see a greater variation in rents across the market.

“Some [landlords] have paid off the mortgage, some might be on a variable loan, some might be on a fixed-rate loan, and they won’t actually see the impact of [the RBA’s cash rate hike] potentially for years,” he said.

“But when it comes to setting rents, they’re all setting rents to maximise what they can get and what’s happening in the market.”

On top of this, most state and territory governments have laws that limit landlords to one rent increase every 12 months, regardless of whether the tenant is on a fixed or periodic lease.

Queensland and Western Australia are the exceptions, where rent can be raised every six months.

Brushing up on the law

Shannyn Laird, head of customer experience at property management agency :Different, agreed that rents are set according to market conditions.

But she said renters should nonetheless keep tabs on what other landlords are charging for similar rental properties in the local area.

That way, they can work out if they are getting a bad deal or if they should brace for a hike because other properties are demanding much higher rents.

Ms Laird advised tenants to brush up on their state government’s tenancy laws to understand their rights in the event that their landlord proposes an “excessive” rent hike. (For example, landlords in Victoria must provide evidence, such as market comparisons, to justify a rent increase.)

And if they are on a good deal, Ms Laird recommends being proactive and locking in those favourable terms.

For example, if a tenant is on a periodic lease, it might be worth asking for a fixed-term contract to delay any future rent increases.