A recent survey by property finance broker Finbri reveals that 44.66% of landlords are considering selling their investment properties if the base rate reaches the anticipated 4.5% in May.
The Bank of England’s Monetary Policy Committee is expected to increase interest rates for the twelfth consecutive time in an attempt to reduce inflation to its target rate of 2%.
With high inflation persisting at 10.1%, industry experts are now predicting a rate increase to 5% by autumn, with a one-in-four chance of it reaching 5.25%.
Finbri’s survey of 1,001 renters found that 31.07% of tenants are concerned about their property security, with 15.18% strongly worried about losing their homes if landlords decide to sell.
Stephen Clark, from Finbri, explained: “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.”
As rates continue to rise, 52.75% of landlords plan to increase rents to cover additional expenses, resulting in higher rents and evictions.
As landlords turn to alternative investments, the private rental sector is expected to face challenges such as reduced rental property stock and increased rents, making it harder for tenants to find affordable accommodation.
Clark 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.”
