Specialist buy-to-let broker Landlord Mortgages says the Bank of England base rate hike will deal a blow to buy-to-let investors.
Lee Grandin, managing director of Landlord Mortgages, says: “Today's rate change will result in a significant blow to buy-to-let landlords, the vast majority of whom have variable interest rate mortgages. In the short-term, the change will see the immediate cash flow of many landlords reduced.
“However, the lack of good rental property and the ongoing strong demand to rent should allow most of the extra costs to be absorbed by increased rents. Rental yields will catch up and buy-to-let will continue to provide attractive returns.
“Higher house prices encourage renting rather than house purchase and it is these price changes that will have a much more significant impact than marginal interest rate changes.”