Increasing mortgage repayment difficulties for landlords
Across the UK, thousands and thousands of landlords are struggling to keep up with mortgage payments on their properties. A problem which could escalate should there be an increase in the Bank of England’s (BOE) base rate.
The base rate currently stands at 0.5%, and the BOE look as though they will hold the current rate for some time yet. This does not alleviate worries of possible increases though. Rate increases would be very problematic for already struggling landlords with large property portfolios. Such an increase in rates would certainly create further financial difficulties during these hard financial times.
A recent survey concluded that some 41% of landlords only just manage to cover their monthly payments with the income generated from renting their property. As little as a 0.25% increase in rates could put many landlords into a loss making situation, never mind an increase of several percent.
An estimated 63% of landlords have increased their rent in a bit to cover their costs, a direct result of the instability within the rental market.
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