It’s not just spiralling interest rates which are affecting buy to lets. These have meant that many with mortgages are letting at a loss, as rents don’t cover their payments any more. The second ‘blow’, to use more tabloidese (who else says ‘spiralling’) is being struck by Santander, and doubtless others will follow. They’re changing their ‘affordability’ calculations, so that the amount of rental income needed to justify borrowing will increase. That will make it harder both to move to a less expensive mortgage deal and to get a new mortgage. And the consequence must be higher rents, where that can be done; or more having to sell up at any price, less property to let and knock-on fall in general house prices. All pretty much predictable with the great gift of foresight. As are many things. B-Word, I’m looking at you.
OK, hands up, I’ve consistently said house prices can’t go up, certainly at this rate, forever. And I’ve been consistently wrong. So far. I’ve spoken to two clients this week, one buying, one selling, who’ve had to pay or been paid over the asking price.