The UK’s mortgage market is in disarray right now following weeks of confusion and volatility thanks, in part, to the recently retracted mini-budget as well as wider economic forces.
For Buy to Let landlords in particular, these are precarious times.
We know that many landlords are questioning what to do with their portfolio, particularly those with mortgage up for renewal in the coming months.
What’s happened to the Buy to Let market?
There’s no getting around the fact that, right now, BTL products are in short supply and those that are available are more expensive than they were just a few months ago.
In one report in The Guardian, it’s claimed that the number of new Buy to Let mortgage deals has reduced by more than half in less than a week, with banks and even specialist lenders pulling products in response to current market turmoil.
It also suggested that the average two-year Buy to Let fixed rate is now nearly 70% higher than at the end of 2021.
For landlords who have bought their property in the last few years (especially those who have taken the maximum loan they could on their property), mortgages could become expensive in the short term.
What does the immediate future look like for Buy to Let landlords?
There’s potential that some landlords will see a reduction in profits within their portfolio in the next 12 months.
According to some reports, the Bank of England could increase interest rates to as high as 6%.
Other reports have also suggested house prices could fall up to 20% in the next year.
So at least in the immediate term, landlords whose Buy to Let mortgages are up for renewal could see their profits hit, unless they’re able to increase rents.
Is it time to sell up on Buy to Lets?
Not necessarily.
First, it’s important to remember that only landlords whose mortgage deals are up for renewal in the immediate future who may face a tough time in the mortgage market.
For other landlords who are in longer fixed-term deals, much of the current market conditions won’t affect your profitability in the same way.
Even if you’re one of the landlords looking at a tougher mortgage renewal process, it’s worth remembering that property investment is a long-term game.
Much of what is happening in the market today is built on the back of reactions to much uncertainty in the wider economy and world events.
Property is a cyclical process, and there will always be peaks and troughs when it comes to the Buy to Let market.
And if other landlords are selling up, it means there are potentially more properties to look at if you can afford to deal with the short-term cost increases.
Get advice from a professional letting agency
If you’re a landlord looking to rent your property, the best thing to do is get advice from a professional letting agency that can ensure you get the best rental income and keep your portfolio as profitable as possible.
With the help of a professional letting agency, you can ensure your properties remain tenanted with the right profile tenant to meet your goals.
Buy to Let will continue to be a successful long-term investment.
Make sure you get the best deals to be a successful landlord.
