Interest rates could spell trouble for landlords

by Morag Lyall

Landlords with rent books could be hit hard if interest rates are increased, one property expert has warned.

A survey by revealed last week that 41 per cent of landlords said that rent barely covers the cost of their mortgage repayments and if interest rates increase by more than two per cent, 43 per cent said they would not be able to cover their mortgage.

Chris Jenkins, co-owner of the Homeowners Advice Centre, commented: "An increase in interest rates will undoubtedly push some ordinary homeowners as well as buy-to-let landlords over the edge of their financial well-being."

He added that interest rates must remain low to provide a foundation for economic recovery, although he predicted that rates will increase by around one per cent ahead of January's VAT rise.

"The survey is particularly worrying for tenants as landlords will be forced to raise rent levels in order to cover their mortgages in the event of interest rate increases," Mr Jenkins added.

Published on: July 20, 2010

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