Almost two thirds of private landlords expect their mortgage payments to rise over the coming year and warn this will lead to higher rents, says the National Residential Landlords Association.  

The body says 60% of landlords expect their mortgage repayments to go up in 2024, as over a quarter of buy-to-let owners plan to remortgage next year.  

The data comes after the Bank of England’s Monetary Policy Committee held rates at 5.25% for the third meeting in a row last week as it battles inflation, which fell to a lower-than-expected 3.9% today.  

The landlord’s association points out that Hamptons says UK property investors paid £15bn in mortgage interest on an annual basis, up 40% over the course of the last year.   

The BTL market is especially exposed to the higher interest rates, given that 82% of mortgages in the sector are interest-only according to the Bank of England. This compares with 11% for owner-occupier mortgages.    

The means that across the private rented sector over the near term, “higher rents are likely, given rising mortgage costs and strong demand,” says the Bank.  

Profits among landlords are at their lowest level since 2007, according to recent data from Savills.   

The National Residential Landlords Association calls on the government to scrap BTL tax hikes “which have cut the supply of homes to rent and led to rising rents”.  

National Residential Landlords Association chief executive Ben Beadle says: “Higher interest rates put continued pressure on renters, as landlords are simply unable to afford growing mortgage costs.  

“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.”