Up to 225,000 landlords face losses as refinancing costs jump

The Telegraph is reporting that ‘as 225,000 landlords face losses on their rental properties when they come to refinance as mortgage costs climb towards 7pc, analysis shows.’

The article can be seen here (subscription may be necessary) and discusses the recent mortgage rate rises, stating ‘Some 226,930 buy-to-let homes across the UK – equivalent to 11pc of all mortgaged rentals – would be unprofitable at current rates, analysis for the Telegraph shows.’

Aneisha Beveridge, head of research at Hamptons, said: “We know that nearly 70pc of landlords in England own a home with a mortgage. That’s a much higher proportion than among owner-occupiers. So landlords are more at risk to the new kind of higher rate environment than the average household.”

A higher-rate taxpayer who bought and let out a property costing £190,000 in 2021 would now be losing as much as £227 every month if they have kept the rent unchanged.

Someone in the same position with a loan-to-value ratio of 75pc would still be making a monthly loss of £119 even if they had raised the rent in line with the wider market.

Ms Beveridge said: “The highest-leveraged landlords who bought in the last couple of years are most at risk. They are the ones who have taken equity out of their properties or bought a new buy-to-let in the last couple of years.”

The figures suggest that more misery is awaiting already stretched renters, as many landlords either raise rents or look to unload some of their portfolios.

It comes as separate numbers from SpareRoom showed that the ratio of renters to advertised rooms in the first six months of 2023 was at its highest level in at least eight years.

Some 12pc more people were looking for a place to live during this period than a year earlier.




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