42% of landlords due to renew their mortgage deal this year

40% of residential landlords with a mortgage, whether fixed, tracker, or discount, are due to renew their mortgage rate in the next 7 months to one year, according to new research from The Mortgage Lender.

A further 41% are due to renew their mortgage in the following 2-3 years.

According to the research, the majority of landlords with a mortgage are currently on a five-year fixed rate (42%), while 21% are on a two-year fix. 15% are on SVR mortgages and 8% are on a tracker mortgage.

Of those landlords needing to renew their mortgage rate this year, they believe their monthly payments will increase by £615 on average.

To deal with higher monthly costs, 30% of landlords have said they plan to increase the rent of the property, 23% have already budgeted for an increase, while 14% said they would sell the property. A further 14% said they plan to convert the property into an HMO in order to secure better returns, and 13% are considering converting to a holiday let.

Chris Kirby, head of sales at The Mortgage Lender, commented: “The Bank of England has been grappling with high inflation for well over a year now, introducing successive rate rises to drive it down to more manageable levels. Although they have had some success in achieving this, there is still a way to go. A rate cut could happen this year, though possibly not until the summer.

“With many due to remortgage this year, it’s important landlords speak to a broker to find the most suitable mortgage for them in order to maintain their property portfolios, particularly as costs of living challenges continue. Brokers can offer invaluable support and guidance to help provide a holistic view of what deals are most suitable for clients before they rush into any decisions.”