UK landlords concerned about rents not covering mortgages

Landlord Expert
By Landlord Expert July 19, 2010 12:08

Last week the Bank of England held the base rate at 0.5% for the 16th consecutive month, which is just as well as according to a poll by flat share website, Spareroom.co.uk, four out of ten UK landlords are receiving rents barely covering the monthly mortgage repayments on their properties.

For 22% of respondents, a rate rise of just 1% would mean the sums don't add up, and for 10% of landlords questioned the situation is far worse, with a rate rise of just 0.5% resulting in a rent-mortgage shortfall.

The research also revealed that six out of ten landlords have been forced to hike monthly rents since the start of the year, with one in five planning to increase rents by 5% this year, and 18% factoring in an increase of between 3% and 5%.

However, more than half of these landlords said they are worried that they could lose loyal and valuable tenants as a result.

Spareroom.co.uk director, Matt Hutchinson, describes Britain's landlords as in a "Catch 22″ situation. He explains: "On the one hand, the rise in Capital Gains Tax for higher rate taxpayers means that many landlords either won't be able to sell their buy-to-let properties full stop or will sell at a far greater loss. "At the same time, holding onto their properties means they are at the mercy of the Bank of England and facing higher mortgage payments."

Landlord Expert
By Landlord Expert July 19, 2010 12:08

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