Private landlords concerned by potential rise in buy-to-let mortgages rates

The research comes the same week as the decision by The Bank of England's Monetary Policy Committee (MPC) to retain the base rate at 0.5% for the month of August. 

The reappearance of several major finance providers, coupled with high demand for rental properties, has encouraged landlords to increase their buy-to-let property portfolios in recent months.

The survey showed that a buy-to-let interest rate rise of two per cent would have a negative impact on 89 per cent of landlords, with 53 per cent concluding that the effect would be significant.  A further eight per cent could be forced to re-evaluate their future as a landlord, with six per cent having to reduce their portfolios or leave the private-rented sector completely.

An interest rate rise of just one per cent on this type of mortgage would have a negative impact on 80 per cent of landlords, with 29 per cent stating that such an increase would have a significant impact on their lettings business.

Almost three quarters of landlords surveyed (73 per cent) have at least one mortgage, and of those 47 per cent have at least five buy-to let mortgages held against their property portfolio.

Just under one half of landlords (49%) strongly agree that the market would further benefit from more buy-to-let lenders and greater competition.

David Salusbury, NLA Chairman, commented:

"These statistics show how important it is for a landlord expanding their portfolio to construct a sound long-term business plan when considering buy-to-let properties.

"The NLA believes that such properties can be a worthwhile investment and can help ease the current housing crisis by providing a source of much-needed housing, but landlords should ensure that they plan for the future and are mindful of any potential increases in buy-to-let interest rates."