Industry News Sam Hunter 12/10/2023

Chancellor needs to act as interest rate hike hits renters and landlords

Following the Bank of England's decision to raise interest rates, the NRLA has issued commentary responding to the news that the Bank's base rate now stands at 5%.

This rate rise represents the 13th consecutive increase in rates since December 2021 - a period which has seen costs increase substantially for private landlords who hold BTL mortgages.

Responding to the Bank of England’s move, Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

“Today’s decision will add further pressure on renters and landlords alike. 85 per cent of buy-to-let mortgages are interest only, making them especially hard hit by rising mortgage costs. Some landlords have seen mortgage payments rise by almost 240 per cent since December 2021.

“Analysis for the NRLA has found that 735,000 rental properties could be lost across the UK if interest rates peaked at five per cent, further exacerbating the supply crisis renters are facing.

“It makes no sense to have a tax system that discourages investment in the homes renters need, and benefit payments that fail to provide vulnerable tenants with the assurance that they can afford their rents.

“The Chancellor needs to take urgent action to support the rental market by reintroducing mortgage interest relief in full and unfreezing housing benefit rates.”

If you would like to read more about today's announcement, you can check out the Bank of England's announcement in full here.