10:50 AM, 15th February 2023, About A year ago 5
A third of private landlords with a buy-to-let mortgage face the prospect of higher costs this year, according to the National Residential Landlords Association (NRLA).
The Bank of England has warned that by the end of the year, monthly repayments for buy-to-let landlords are expected to rise by £175. A fifth of landlords with such a mortgage will face increases of over £300.
The NRLA research found that 63% of landlords have a buy-to-let mortgage on at least one property. Of this group, 29% plan to re-mortgage at least one property over the course of the next year.
According to the Bank of England the mismatch between the demand and supply of rented housing, is in part a consequence of higher borrowing costs.
The data from the NRLA found that 65% of landlords in England and Wales confirm that demand for privately rented housing increased during the final quarter of 2022. This was up from 56% who reported increased demand during the fourth quarter of 2021.
Despite the strong demand, 30% of landlords said they plan to cut the size of their portfolio in 2023, the highest level of planned disinvestment seen in more than six years. Only 9% said they plan to increase the size of their portfolio over the next 12 months.
The NRLA and the cross-party Levelling Up, Housing and Communities Select Committee are calling on the government to review the impact of recent tax rises on the sector to boost the supply of properties to rent. The Committee said: “landlords with small portfolios are currently critical to the provision of private rented accommodation.” It argues that a tax review of this kind should “make it more financially attractive to smaller landlords.”
Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “It is time the Government stepped in and accepted calls by the NRLA, the Select Committee and others for tax measures to encourage the supply of homes to rent. Without this, renters face a bleak future as finding somewhere to live becomes increasingly harder.”