Buy-to-let set for serious trouble

Although it is reported that the Bank of England will not raise interest rates by a further 0.25 per cent in the coming weeks, National Homebuyers is urging buy-to-let property owners to consider their finances carefully.

David Harber of National Homebuyers, said: “The cost of borrowing money is escalating, especially with commentators suggesting interest rates will increase to 6 per cent, when two years ago it was 4 per cent. Landlords who bought their property then are struggling to achieve the yields they require.

“To do business through buy-to-let, landlords need to maintain low repayments in order to make a profit, this is the difference between making a profit or going bust, Property prices are beginning to fall and when the Bank of England decides to hike rates even further, those who have bought properties recently will be severely affected.”

Increases could see tenants hit with rent hikes that are unaffordable. National Homebuyers believe that the property market will experience a freeze before a sudden collapse if costs continue to soar.