According to research for the NRLA, 60 per cent of landlords expect their mortgage repayments to rise despite a quarter saying they plan to renegotiate their loans
Well over half of private landlords may be forced to increase rents next year as they see their mortgage costs climb.
According to research for the National Residential Landlords Association, 60 per cent of landlords expect their mortgage repayments to rise despite a quarter saying they plan to renegotiate their loans.
The news comes after confirmation from the Bank of England last week that the base interest rate will stay at the 15-year high of 5.25 per cent.
As per data from Hamptons, landlord investors across the UK are now paying £15 billion in mortgage interest on an annual basis, up 40 per cent over the course of the last year.
The BTL market is especially exposed to the impact of higher interest rates, with 82 per cent of mortgages in the sector interest-only, as per the Bank of England. This is compared to just 11 per cent for owner-occupier mortgages.
The National Residential Landlords Association calls on the Government to support the sector by scrapping tax hikes, which have cut the supply of homes to rent and led to rising rents.
Ben Beadle, CEO at NRLA, comments: Higher interest rates put continued pressure on renters, as landlords are simply unable to afford growing mortgage costs.
Ministers need to accept that tax hikes on the sector have also played a major role in the affordability challenges we now see across the rental market, Beadle adds.
It is time to reverse course and develop pro-growth tax measures. Without them it is renters who will continue to struggle as demand exceeds supply and rents go up, he says.
According to research by Capital Economics for the NRLA, removing the 3 per cent stamp duty levy on the purchase of additional homes would see almost 900,000 new private rented homes across the UK over the next 10 years.