The Telegraph are warning about the potential problems facing buy to let landlords, if the mortgage rate continues to rise.
The article can be seen here (subscription might be necessary), and states ‘Landlords will be forced to sell up or inflict huge rent rises on their tenants as soaring mortgage rates risk destroying the buy-to-let model.’
And goes on ‘Tenants will be unable to afford higher rents because of the cost-of-living crisis and growing tax burden. Analysts have warned that Britain is on the cusp of a “buy-to-let explosion”.
If landlords who come to the end of a fixed-rate deal in 2023 or 2024 have to pay mortgage rates that are four percentage points higher than currently, more than half will be unable to remortgage unless they raise rents, according to Moody’s, a credit rating agency.
In this scenario, these landlords would have to raise rents by 27pc in order to be able to refinance, it warned. Nearly two thirds of all fixed-rate buy-to-let mortgages will expire by the end of 2024, according to Moody’s, which analysed a sample of 52,000 loans.’
Note that since this article was published, the Chancellor has announced an austerity budget.