Four in 10 (40 per cent) residential landlords are due to renew their mortgage rate in the next seven months to a year.
Research from The Mortgage Lender, which surveyed residential landlords to delve into the state and sentiment of the current market, also found a further 41 per cent are due to renew their mortgage in the following two to three years.
The research found 42 per cent of landlords were currently on a 5 year fixed mortgage, while 21 per cent were on a 2 year fixed deal.
Meanwhile, 15 per cent of landlords were on standard variable rate mortgages, and 8 per cent were on a tracker mortgage, meaning these borrowers tend to see an immediate change in their monthly payments if the Bank of England decides to change the base rate.
The Mortgage Lender midlands, south & specialist distribution head of sales, Chris Kirby, said: “The Bank of England has been grappling with high inflation for well over a year now, introducing successive rate rises to drive it down to more manageable levels.
“Although they have had some success in achieving this, there is still a way to go. A rate cut could happen this year, though possibly not until the summer.”
Kirby added with many due to remortgage this year, it’s “important” landlords speak to a broker to find the most suitable mortgage for them in order to maintain their property portfolios, particularly as costs of living challenges continue.
“Brokers can offer invaluable support and guidance to help provide a holistic view of what deals are most suitable for clients before they rush into any decisions,” he added.
How landlords were choosing to deal with higher monthly costs was also revealed in the research, with 30 per cent of landlords saying they plan to increase the rent of the property, the most commonly cited method.
This was ahead of the 23 per cent who have already budgeted for an increase and the 14 per cent which said they would sell the property.
A further 14 per cent said they plan to convert the property into an HMO in order to secure better returns and 13 per cent are considering converting to a holiday let.
tom.dunstan@ft.com
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