If the UK base rate hits the expected 4.5% nearly half (44%) of landlords will look to sell their investment properties, according to property finance broker Finbri.
CPI inflation is still high, standing at 8.9% in March, meaning it’s likely the base rate will continue rising until it gets closer to the goal of 2%.
There’s a 97% chance the base interest rate will reach 4.5% on May 11th, while it’s thought it could then rise to 5% or even 5.25%.
Stephen Clark, from property finance broker Finbri, said: “The combination of rising interest rates, successive hostile legislative and regulatory changes places significant burdens on private landlords.
“Unsurprisingly, large numbers of private landlords are selling up and exiting the UK rental market. With reduced rental stock in the market and booming demand, those properties that are available have even higher rents which is a source of great concern for renters.”
Over half (52%) of landlords are set to raise rents and increase evictions, as Finbri labelled the housing market ‘precarious’.
Food and nonalcoholic beverages prices rose to their highest level since 1977 in March.
This is also the worst rate of any large advanced major economy.
Further increases of this scale would negatively affect the economy’s ability to grow, increase the likelihood of a recession, and harm home values as mortgage rates once again continue on their upward trajectory.
A third (31%) of tenants are concerned about their property security – and with more landlords looking to sell if rates increase, the 15% of renters that are strongly concerned about losing their homes, may have their fears justified.
Renters are feeling the pressure of rising costs, as 27% have experienced anxiety due to renting and 73% of UK renters are strongly concerned (36%) or concerned (37%) about rent increases.
Finbri added: “Renters are experiencing anxiety and fears over energy prices, rent increases and the UK economic outlook.
“These are uncertain times for the UK rental market, and landlords and tenants must work together to navigate the current climate.
“Whilst landlords and tenants haven’t always been considered equals, it’s clear that in today’s housing market, their relationship is more symbiotic than ever before, each party 100% requires the other to survive.”
