The National Residential Landlords Association (NRLA) has called for urgent government intervention following the Bank of England’s decision to raise interest rates to 5%.
Ben Beadle, chief executive of NRLA, voiced concern about the intensified pressures on renters and landlords in the wake of this move.
“Today’s decision will add further pressure on renters and landlords alike. 85% of buy-to-let mortgages are interest only, which means they are particularly exposed to the impact of rising mortgage costs,” Beadle stated.
He highlighted that consecutive base rate hikes have significantly inflated landlords’ mortgage payments, with some soaring by almost 240% since December 2021. Such rapid growth is now threatening the viability of their businesses.
“Analysis for the NRLA finds that 735,000 rental properties could be lost across the UK if interest rates peaked at five per cent. This will exacerbate the ongoing supply and demand crisis across the private rented sector,” Beadle warned.
He argued that the current tax system, which he claims discourages investment in rental properties, and frozen housing benefit rates, which offer little reassurance to vulnerable tenants, need to be addressed.
Beadle said: “It makes no sense to have a tax system that discourages investment in the homes renters need, or benefit payments that fail to reassure vulnerable tenants that they will be able to afford their rents.”
He urged the Chancellor to take swift action in supporting the rental market. “The Chancellor must take urgent action to support the rental market by reintroducing mortgage interest relief in full and by unfreezing housing benefit rates,” Beadle concluded.
