A fifth of landlords would sell-up in the UK to invest abroad if interest rates creep up to 6% according to a new study by Ezylet.co.uk.
The survey, commissioned by the online property lettings company, has revealed that three quarters of residential buy-to-let property owners would be affected by 6% interest rate and a further 41% believe that profit margins will all but disappear.
The report, entitled: ‘Challenges for the Great British Landlord’ has highlighted the ongoing battle faced by British property developers against growing interest rates. Many landlords have reported feeling disenfranchised with the UK property market to the extent that they would consider dismissing the UK as an option for further investment opportunities.
Myak Homberger, Marketing Director at Ezylet.co.uk explains: “Buy-to-let property investment has become extremely popular in recent years – attracting many ‘first-timers’ as a way of supplementing their income or pension arrangements. So, it’s critical that we work closely with organisations such as The National Landlords’ Association to find ways to better support them.”
The study found that such a sharp rise in interest rates may have wider social consequences than first thought. In recent years, buy-to-let landlords have been found to have been instrumental in the general improvement of property in local areas, increasing the value of many people’s homes. The worry is that a downturn in buy-to-let property investment could have a negative impact on the areas that would traditionally be attractive to property developers.
The research also revealed that UK landlords have an average portfolio of five domestic properties, while 36% have two or three properties and 28% have four or more suggesting that more landlords will feel a tight pinch from a 6% interest rate, than won’t.
Learn more about buy-to-let properties
or find buy-to-let mortgages