Some 15 per cent of landlords are considering selling up due to rising costs associated with their property, data from Cornerstone Tax has revealed.
This news comes in light of last week’s report from The Hamptons Monthly Letting Index which found that UK landlords are collectively paying £15bn in mortgage interest annually – up by £4.3bn over the last 12 months, totalling a 40% increase.
The Bank of England’s long battle with inflation beginning in December 2021 has pushed interest rates up from near zero to a historic high of 5.25% as of last month, this has had a particular impact on landlords that took our mortgages on buy-to-let schemes during the era of low interest rates in the 2010s under the assumption that their property would be a safe investment.
According to Cornerstone’s data, a staggering 20% of landlords became one without the sufficient knowledge needed and have lost thousands as a result, with average estimates as high as £7500 in 2023 alone.
Cornerstone Group International chairman, David Hannah, said the data highlights a “clear issue” in the UK’s rental market,
“Many of these landlords took out mortgages on buy-to-let schemes during a period of sustained low interest rates; fast forward to 2023 and the pressure facing landlords is simply too much,” he explained.
He went on to say ‘Our data highlights a clear issue in the UK’s rental market. Many of these landlords took out mortgages on buy-to-let schemes during a period of sustained low interest rates; fast forward to 2023 and the pressure currently facing landlords is simply too much.
“Spiralling interest rates and the highest tax burden since the Second World War have forced thousands of landlords to sell up, which then puts further pressure on renters due to a lack of stock.
“We are generally seeing an exodus of landlords from the capital and South East, looking towards the North East of England instead. It’s a region that’s seen the highest growth in property prices in the last twelve months, with many seeing it as a much safer investment than the capital.”