Landlords are being advised to check when their current mortgage fixed terms are expiring or see whether they wish to have certainty on their monthly repayments by looking at a new fixed rate now.

“The Bank of England’s increase in Base Rate from 2.25 to 3.0 per cent follows similar increases in rates from the Fed Reserve in the US and the European Central Bank. These increases are all with the goal of curbing the rapid increase in inflation which has now topped 10 per cent against the Bank of England’s target rate of 2.0 per cent” says Angus Stewart of online mortgager broker Property Master.

He continues: “Landlords should also expect any mortgage on a tracker or variable rate to reflect this rate increase and while many fixed rates are already pricing in this level of interest rate we are seeing continued fluctuations in lenders’ rates. The good news is that there is now greater stability in the financial markets and products are not being withdrawn and repriced as they were immediately after September’s disastrous mini budget.

“We do expect base rate to continue to increase over the next year to between 4.0 and 5.0 per cent so this is a good time for landlords to look at their current mortgage rate and see if they can lock in some certainty of monthly repayment.”

Apart from increasing interest rates lenders are also increasing stress rates they use to assess affordability, and Property Master says this can have a significant impact on the amount landlords can borrow when they purchase or remortgage. 

Stewart concludes that landlords are being squeezed on all fronts.  

“With higher interest payments that cannot be offset against tax, a need to improve the energy efficiency of properties, tenants that are likely to struggle to pay rent and the increasing cost of building materials these are already impacting the profitability of buy to let and we expect more landlords to decide it’s now time to sell up.”