Buy-to-let mortgage broker, Property Master, has warned that landlords will face higher borrowing costs despite the decision to keep the Bank Rate at 0.1%.
The central bank’s Monetary Poly Committee voted 7-2 to maintain the Bank Rate at 0.1%, despite widespread expectation in the markets that there would be a rise.
Angus Stewart, chief executive of Property Master, said: “Whilst today’s decision by the Bank of England to hold the base rate at its current level will be welcomed by landlords it is unfortunately not the end of the story.
“We were beginning to see buy-to-let mortgage rates creep up well before today’s MPC meeting as lenders think that sooner or later the era of record low interest rates will come to an end. I am afraid that the starting pistol on rising rates has already been fired.
“A rising interest rate environment for landlords will increase costs and knock confidence in the sector. Landlords have seen a raft of tax and regulatory changes that have chipped away at the profitability of their businesses. But this hit has been largely masked by very low interest rates. This is no longer the case, and we must brace ourselves for the smaller players in this market to decide that being a landlord no longer makes sense for them. Inevitably, this will lead to a shortage of rented accommodation and higher rents.”