Moneyfacts worries about losing landlords despite rising product choice

The next few months of the buy-to-let sector are crucial in seeing whether landlords can weather the UK’s economic storm and stay in the market, says Rachel Springall, finance expert at Moneyfactscompare.co.uk.

Landlords who remortgage now have lots of choice, as there are currently 2,581 mortgages to choose from, up from 988 in October 2022.

However rates averaged at 6.40% in October 2023, up from 5.57% the year before, and from 2.92% in October 2021.

Springall said: “Despite such positivity, some landlords may seriously be considering selling up, as the profitability of a buy-to-let portfolio may not be enough to cover costs. Over the years, landlords’ profit margins have been hit by a cull in mortgage rate tax relief, tax changes for CGT and holiday lets, plus new EPC requirements.

“The enticement to invest for new landlords is prevalent, as rental growth on a newly let property hit 12% across Great Britain, according to a study by Hamptons, which also cited the long-term decline in rental stock will continue to underpin future rental growth.

“The months ahead for the buy-to-let sector are crucial, so any investor would be wise to seek advice before they commit and be conscious of any rental expectations amid rising costs.

“Providers will need to carefully balance supporting their existing customers and work hard to entice new business to encourage an optimistic outlook for investors in the months ahead.”