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

A survey* by the National Landlords Association (NLA) has shown that the majority of private landlords will be affected by a rise in buy-to-let interest 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, 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.”

-ENDS-

For further information, please contact:
Dane, Svenson, Press Officer, NLA
0207 840 8925
dane.svenson@landlords.org.uk


NOTES TO EDITORS:

*662 NLA members were surveyed.

The survey was conducted by the NLA and BDRC Continental, the UK’s largest independent research agency, to evaluate landlord’s concerns during the second quarter of 2011.

The National Landlords Association (NLA) is the UK’s leading organisation for private-residential landlords. It has over 20,000 paid members, ranging from full-time landlords with large property portfolios to those with just a single letting. NLA membership helps landlords make a success of their lettings business by providing a wide range of information, advice and services. The NLA campaigns for the legitimate interests of landlords by seeking to influence decision-makers at all levels of government and by making landlords’ collective voice heard in the media. It seeks to raise standards in the private-rented sector while aiming to ensure that landlords are aware of their statutory rights and responsibilities. Based at its head office in Central London, the NLA currently employs over 40 full-time staff and has a network of more than 40 regional representatives and branches throughout the UK.