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| Version 1 | Version 2 |
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| Mortgages: New squeeze on landlords will hit renters too | Mortgages: New squeeze on landlords will hit renters too |
| (1 day later) | |
| Landlords are making their lowest profits for 16 years as interest rates rise, leading some to look to leave the sector, estate agency Savills has said. | Landlords are making their lowest profits for 16 years as interest rates rise, leading some to look to leave the sector, estate agency Savills has said. |
| Twelve consecutive increases in the Bank of England's base rate, matched by rising mortgage costs, were putting the squeeze on landlords' income, it said. | Twelve consecutive increases in the Bank of England's base rate, matched by rising mortgage costs, were putting the squeeze on landlords' income, it said. |
| Many smaller buy-to-let investors were also near, or at, retirement age. | Many smaller buy-to-let investors were also near, or at, retirement age. |
| If they decide to sell up, fewer homes could be available and renting would get more expensive. | If they decide to sell up, fewer homes could be available and renting would get more expensive. |
| "Following a boom period for buy-to-let landlords, 2023 marks a turning point for Britain's private rented sector," said Lucian Cook, head of residential research at Savills. | "Following a boom period for buy-to-let landlords, 2023 marks a turning point for Britain's private rented sector," said Lucian Cook, head of residential research at Savills. |
| "There is a very real risk that landlords will exit the sector, particularly those with high levels of borrowing, putting increased pressure on a sector where demand significantly outweighs supply in many locations." | "There is a very real risk that landlords will exit the sector, particularly those with high levels of borrowing, putting increased pressure on a sector where demand significantly outweighs supply in many locations." |
| Recent events | Recent events |
| Interest rates have been rising since December 2021, and in recent days expectations of further increases have been heightened. | |
| Data on wages and rising prices mean markets anticipate inflation and interest rates to stay higher for longer than previously expected. | Data on wages and rising prices mean markets anticipate inflation and interest rates to stay higher for longer than previously expected. |
| This has led to government borrowing costs - which directly impact mortgage rates - rising to their highest rate since last year's mini-budget. | This has led to government borrowing costs - which directly impact mortgage rates - rising to their highest rate since last year's mini-budget. |
| Mortgage rates are expected to continue rising - leaving landlords particularly exposed. | Mortgage rates are expected to continue rising - leaving landlords particularly exposed. |
| Five reasons why mortgages are getting us down | Five reasons why mortgages are getting us down |
| More pain for renters as landlords look to sell up | More pain for renters as landlords look to sell up |
| Warning UK mortgage rates set to rise further | Warning UK mortgage rates set to rise further |
| Are you a landlord? Get in touch and share your experiences. | Are you a landlord? Get in touch and share your experiences. |
| Email haveyoursay@bbc.co.uk | Email haveyoursay@bbc.co.uk |
| WhatsApp: +44 7756 165803 | WhatsApp: +44 7756 165803 |
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| Savills said data from the first three months of the year showed buy-to-let investors had already been squeezed, with net profits falling below 4% - the lowest since 2007. That compares with profits of as much as 23% when rates were at ultra-low levels during the last decade. | Savills said data from the first three months of the year showed buy-to-let investors had already been squeezed, with net profits falling below 4% - the lowest since 2007. That compares with profits of as much as 23% when rates were at ultra-low levels during the last decade. |
| It said that larger landlords could be the most likely to stay in the sector. | It said that larger landlords could be the most likely to stay in the sector. |
| Savills research suggests 1.9 million properties are owned by 620,000 landlords aged over 65, with a further 1.9 million owned by landlords aged between 55 and 64. | Savills research suggests 1.9 million properties are owned by 620,000 landlords aged over 65, with a further 1.9 million owned by landlords aged between 55 and 64. |
| They could choose to leave, meaning tenants would have less choice, Mr Cook said. Better-paid renters in more secure employment could go to the front of the queue for those remaining properties, he added. | They could choose to leave, meaning tenants would have less choice, Mr Cook said. Better-paid renters in more secure employment could go to the front of the queue for those remaining properties, he added. |
| What are your renting rights? | What are your renting rights? |
| How much can my landlord increase the rent? It depends on your agreement but rises must be fair, realistic and in line with local properties and there's usually a month's notice. | How much can my landlord increase the rent? It depends on your agreement but rises must be fair, realistic and in line with local properties and there's usually a month's notice. |
| Can my landlord evict me? Landlords need to follow strict rules such as giving written notice. Once the notice period ends, the landlord can start eviction proceedings through court. | Can my landlord evict me? Landlords need to follow strict rules such as giving written notice. Once the notice period ends, the landlord can start eviction proceedings through court. |
| Can a landlord refuse people on benefits? No. DSS policies are unlawful discrimination, says charity Shelter. Some councils have lists of private landlords who rent to tenants claiming benefits. | Can a landlord refuse people on benefits? No. DSS policies are unlawful discrimination, says charity Shelter. Some councils have lists of private landlords who rent to tenants claiming benefits. |
| There's more on your renting rights and where to go for help here. | There's more on your renting rights and where to go for help here. |
| Newly-published figures from the Bank of England show that the proportion of mortgages advanced to buy-to-let investors is at its lowest level since 2011. | Newly-published figures from the Bank of England show that the proportion of mortgages advanced to buy-to-let investors is at its lowest level since 2011. |
| The data also showed how total mortgage lending dived during the first three months of the year. | The data also showed how total mortgage lending dived during the first three months of the year. |
| Total mortgage borrowing stood at £58.8bn, down 23.6% in a year. The Bank also recorded a rise in people falling behind on mortgage repayments. | Total mortgage borrowing stood at £58.8bn, down 23.6% in a year. The Bank also recorded a rise in people falling behind on mortgage repayments. |
| Since then, mortgage rates have climbed for borrowers looking for a new deal, with a typical two-year fixed-rate deal now at a rate of 5.9%, according to the financial information service Moneyfacts. The average rate on a five-year fixed-rate mortgage is 5.55%. | Since then, mortgage rates have climbed for borrowers looking for a new deal, with a typical two-year fixed-rate deal now at a rate of 5.9%, according to the financial information service Moneyfacts. The average rate on a five-year fixed-rate mortgage is 5.55%. |
| Related Topics | Related Topics |
| Personal finance | Personal finance |
| Housing market | Housing market |
| Renting | Renting |
| Cost of living | Cost of living |
| Mortgages | Mortgages |