Landlords vulnerable to rate rises
An interest rate rise of 2% would have a negative impact on 89% of landlords, with 53% concluding that the effect would be significant in a survey by the NLA.
A further 8% would be forced to re-evaluate their future as a landlord, with 6% having to reduce their portfolios or leave the private-rented sector completely.
Some 662 landlords participated in the survey.
Almost three quarters of those landlords have at least one mortgage, and of those 47% have at least five BTL mortgages held against their property portfolio.
Under one half of landlords, 49% strongly agree that the market would further benefit from more Buy-to-letlenders and greater competition.
David Salusbury, chairman at the NLA, said: “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 BTL interest rates.”
Lisa Heeringa, Lettings Manger at Shaws Estate Agents said: “This survey really only states a combination of the obvious i.e. if interest rates go up it will adversely affect landlords who are borrowing and also that landlords need to have a sensible plan in respect of their portfolios that balances their gearing with the realities of the marketplace.
By talking to an experienced lettings agent such as ourselves, we would seek to work wit landlords to maximise the return on their investment.”
