The Telegraph are reporting the problems of Section 24 tax amendments, now being shown up by rising interest rates.
The article can be seen here (subscription may be required) and looks at a buy-to-let landlord near Bristol, that when one of her fixed-rate mortgages comes to the end, her £930 per year profit on the property will become a £4,980 loss.
It goes on to say ‘In order for the property to be mortgageable, Mrs Deane would need to raise the rent by 25pc. But her tenant is on housing benefits, which have been frozen since 2020. “I do not see how this level of increase could be imposed on our tenants given their low income and the rising cost of living,” Mrs Deane said.
Two of Mrs Deane’s fixed-rate deals expire in June next year. The remaining three expire in January 2024. She has already served notice to one of her tenants. She said: “The financial and moral dilemma we find ourselves in is heart-breaking.”
The Bank of England has warned that the remortgage crunch will hit the buy-to-let sector particularly hard because 85pc of outstanding buy-to-let mortgages are interest-only, which are subject to more stringent stress testing than repayment mortgages.
There is also a particular risk for landlords who had agreed a consent to let on their residential mortgages.’