Skip to content

According to data compiled for the National Residential Landlords Association (NRLA) by research consultancy BVA-BDRC, 63% of landlords have a buy-to-let mortgage on at least one property. With ten interest rate hikes in a row, the Bank of England predicts that monthly mortgage repayments for buy-to-let landlords will rise by around £175 by the end of the year. It has warned that a fifth of landlords with such a mortgage will face monthly increases of more than £300. According to the Bank of England, the mismatch between demand and supply for rented housing is caused in part by higher borrowing costs.

According to recent data, 65% of landlords in England and Wales confirm that demand for private rented housing increased in the fourth quarter of 2022, up from 56% in the fourth quarter of 2021. According to the Bank of England, the mismatch between the demand and supply of privately rented housing is caused in part by higher borrowing costs.  Despite the high demand for rental property, 30% of landlords plan to reduce the size of their portfolio in 2023, the highest level of planned disinvestment in over six years. Only 9% said they intend to increase the size of their portfolio in the next 12 months, down from 14% in Q3 2021. This will put even more pressure on those looking for rental housing, and when combined with rising energy prices, the future looks bleak for renters.

NRLA Action

The NRLA is urging the government’s Levelling Up, Housing, and Communities Select Committee to examine the impact of recent tax increases on the PRS in order to increase the supply of rental properties. The Committee correctly concludes that “small portfolio landlords are currently critical to the provision of private rented accommodation.” It argues that a tax review of this kind should “make it more financially attractive to smaller landlords.” “It is time the government stepped in and accepted calls from the NRLA, the Select Committee, and others for tax measures to encourage the supply of homes to rent,” said Ben Beadle, chief executive of the NRLA.

Despite the interest rate fluctuation, we do believe that the PRS will boom in the coming few years.  A recent survey by finance broker Finbri concluded after a survey of 1,000 UK renters:

  • 48.45% experienced increased rental prices
  • 35.86% experienced a lack of properties available in the desired location
  • 18.08% experienced competition over the asking price of the rental property
  • 11.49% were unable to even secure a viewing

If you can secure a fixed-rate mortgage or are lucky enough to be a cash buyer, then now is the time to build on your rental portfolio.  If you have any questions at all, please get in touch with me to discuss.

Sara Grey is the lettings manager at Wills and Smerdon

Sara Gray, MARLA

Lettings Manager