Landlords Face Sharp Increase in BTL Repayments

Posted on Thursday, July 13, 2023

Landlords Face Sharp Increase in BTL Repayments

The Bank of England has published its latest Financial Stability Report, in which it is confirmed that average monthly repayments for buy-to-let mortgage holders will go up by approximately £275 by the end of 2025.

The Bank’s data also underlines the challenges which many private landlords now face, citing as it does the unfavourable market conditions which many landlords currently experience across the private rented sector.

There are calls for government support as Landlord's face this sharp rise, millions of borrowers face the prospect of a further 0.5% rise in interest rates next month as the Bank of England (BoE) looks to tackle high inflation and wages increases.

Analysts believe the BoE could match June’s shock half-point increase in interest rates at August’s meeting in a move that would take the base rate to 5.5% and lead to further mortgage and loan increases.

It comes after official data showed that wages have increased at a record rate amid fears that inflation could remain stubbornly high.

The Office for National Statistics (ONS) revealed that average regular pay, not including bonuses, was 7.3% higher in the three months to May compared with the same period last year. That matches the revised figure for the previous quarter and is the joint highest since records began in 2001.

The most recent figures show the annual rate of consumer price inflation sitting at 8.7% though food inflation remains well into double digits.

The market is pricing in a 70% chance that the central bank’s monetary policy committee (MPC) will vote for a 0.5% rise next month.

Forecasts of more rate rises by the Bank have helped to push mortgage costs to their highest level for 15 years.

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