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 shortly after 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 2% would have a negative impact on 89% of landlords, with 53% concluding that the effect would be significant. A further 8% could be forced to re-evaluate their future as a landlord, with 6% having to reduce their portfolios or leave the private-rented sector completely.
An interest rate rise of just 1% on this type of mortgage would have a negative impact on 80% of landlords, with 29% stating that such an increase would have a significant impact on their lettings business.
Almost three quarters of landlords surveyed (73%) have at least one mortgage, and of those 47% have at least five buy-to let mortgages held against their property portfolio.