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Almost half of landlords due to renew mortgage this year

  • 12/03/2024
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Almost half of landlords due to renew mortgage this year
Around 40 per cent of residential landlords with a mortgage are set to refresh their mortgages in the next seven months to a year.

According to a survey from The Mortgage Lender (TML), which surveyed 1,001 residential buy-to-let (BTL) landlords, a further 41 per cent are due to renew their mortgage in the next 2-3 years.

Most landlords – 42 per cent – are on a five-year fixed rate mortgage, and 21 per cent are on a two-year fixed rate.

Around 15 per cent are on a standard variable rate (SVR), with eight per cent on trackers. The report said that these borrowers tend to see an “immediate change” in the monthly payments due to base rate increases.

TML said that, while mortgage rates have fallen from their peak last year, those needing to remortgage in the next year will have to pay more than they currently are.

Of those landlords needing to renew their mortgage, they believe that monthly repayments will go up by £615 on average.

Nearly a third of landlords say they plan to increase rent to meet rising monthly repayments, 23 per cent have budgets for an increase and 14 per cent said they would sell the property.

Another 14 per cent said they would convert their property to a house of multiple occupancy (HMO) and 13 per cent were looking at moving the property to a holiday let.

Chris Kirby, head of sales for the Midlands, south and specialist distribution at TML, commented: “The Bank of England has been grappling with high inflation for well over a year now, introducing successive rate rises to drive it down to more manageable levels.

“Although they have had some success in achieving this, there is still a way to go. A rate cut could happen this year, though possibly not until the summer.”

He continued: “With many due to remortgage this year, it’s important landlords speak to a broker to find the most suitable mortgage for them in order to maintain their property portfolios, particularly as cost-of-living challenges continue.

“Brokers can offer invaluable support and guidance to help provide a holistic view of what deals are most suitable for clients before they rush into any decisions.”

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