Buy to Let

Rising mortgage payments for landlords forcing up rent

Rising mortgage payments for landlords forcing up rent
Christina Hoghton
Written By:
Christina Hoghton

Almost two thirds of landlords expect to see mortgage payments increase over the next year, leading to potential rent hikes.

That’s the conclusion of new research from the National Residential Landlords Association (NRLA), which found that while a quarter of landlords are planning to remortgage in the next year, a more significant 60 per cent expect their mortgage repayments to increase. The trade body noted that landlords are particularly exposed to the impact of higher interest rates, given the fact that the vast majority of buy-to-let mortgages are taken out on an interest-only basis.

It pointed to data from Hamptons which found that landlords are now paying £15bn in mortgage interest each year, with that figure having jumped by 40 per cent over the course of the last year.


Despite the likelihood of higher rents, recent research from Savills suggested that landlord profits are at their lowest levels since 2007. The NRLA said that this showed rent rises were simply required to cover increased costs, and not a sign of profiteering.

The trade body called on the government to offer greater support to the private rented sector by scrapping tax hikes which it said were resulting in a drop in the supply of rental properties, such as the additional stamp duty rate paid on purchases of second homes.

Previous research for the trade body by Capital Economics argued that dropping that additional rate would mean a further 900,000 private rented homes being made available over the next decade.

Ben Beadle, chief executive of the NRLA, said that higher interest rates are putting pressure on renters, with landlords simply unable to afford growing mortgage costs.

He continued: “Ministers need to accept that tax hikes on the sector have also played a major role in the affordability challenges we now see across the rental market.

“It’s time to reverse course and develop pro-growth tax measures. Without them it is renters who will continue to struggle as demand outstrips supply and rents go up.”