Government needs to help landlords facing sharp rise in BTL repayments

Buy-to-let investors are set to see their average monthly mortgage repayments go up by approximately £275 by the end of 2025.

The statistics were published in the Bank of England’s July Financial Stability Report.

It says: “Landlords are currently subject to a combination of factors that are putting pressure on their profitability: higher interest rates and structural changes – including adjustments to income and capital gains tax rules and proposed changes to building energy efficiency regulations and tenancy protection.”

It notes the private rented sector is an “important part of the UK housing market” covering around

19% of households, adding: “Many private landlords finance their investment through mortgage borrowing: around 7% of the total UK housing stock has a buy-to-let mortgage on it and this type of lending comprises around 18% of the overall mortgage market by value.”

Sheldon Bosley Knight’s head of lettings Becca Dean said: “Landlords are increasingly finding themselves in an impossible position thanks to a combination of increasing mortgage costs, inflation and the cost of living.

“They are having to choose between leaving the market altogether and thus increasing the demand for housing which has long been outstripping supply, or increasing rents to cover their costs or try and absorb those costs themselves. Most simply cannot afford to do this.

“The government needs to step in to help and protect the market from this growing crisis before it’s too late.

“This could take the form of helping renters in terms of housing benefit and energy bills and for landlords, more favourable terms on buy-tolet mortgage deals and scrapping the proposed changes to the capital gains tax threshold.”