A prominent buy to let mortgage expert says yesterday base rate rise by the Bank of England is expected to hit landlords very quickly.
Angus Stewart, chief executive of Property Master, says of the Monetary Policy Committee’s decision to increase the base rate from 0.75 to 1.0 per cent: “[This is] four base rate rises in a row … it will undoubtedly feed through quickly into higher buy-to-let mortgage rates for landlords. The squeeze on landlords continues with higher borrowing costs, increased regulation, and increased taxes.
“The fear is that we will see many landlords choosing to exit the market and the resulting reduced supply of private rented property will add still further to the pressure on rents.
“We are seeing buy-to-let mortgage products removed from the market only to return at a higher price on a more or less daily basis. We have also seen some newer entrants to the mortgage market have to withdraw their products as they have been unable to source their usual funds from institutional lenders.
“This is very worrying. We face reduced choice in the buy-to-let market which will in turn have a further impact on the rising cost of mortgages.”
Meanwhile Nathan Emerson, chief executive of Propertymark, adds: "This rise is understandable from a wider economic point of view and considering where they have been they are still historically low. The concern around the recent rises are that they are coupled with high house prices.
"However, house prices have only risen at such a rate as buyers have been prepared to pay over the marketed price to secure a home above others. Whilst this competition is cooling down in some areas it is still present with large amounts of people wanting to move. We don’t anticipate this demand will be watered down but what those movers are able to pay will certainly start to be reconsidered over the coming months."
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