Landlords’ confidence in the UK’s financial markets has tripled over the last year, according to research from the National Landlords Association (NLA).
Just under a third, 31%, of landlords rate their expectations of the UK’s financial markets as ‘good’ or ‘very good’ in the coming months, a rise of 21% from the same point last year.
In addition, 27% of landlords say they plan to acquire property over the next 12 months but their perceived buoyancy is tempered by the finding that moderate rises to interest rates would put pressure on their ability to meet mortgage repayments.
Just over a fifth, 21%, of landlords say keeping up mortgage payments would be difficult with interest rate rises of just two per cent. Some 35% would struggle to keep up payments with a rise of 2.5%, and 41% with a rise of 3%.
The Bank of England recently outlined that interest rates will remain at the current low of 0.5%, with the first rate increases likely to happen in late 2015.
‘Landlord optimism around the UK’s financial recovery, coupled with the Bank of England’s announcement makes good reading for anyone considering buy to let investment. This is evidenced by the significant number of landlords who will be looking to add property to their portfolios over the coming months,’ said Carolyn Uphill, chairman of the NLA.
‘However, it’s inevitable that interest rates will rise as the economy improves and we move out of recession and our findings show that moderate increases would leave many landlords stretched in meeting their mortgage repayments,’ she pointed out.
‘Anyone thinking about buy to let investment should do so with a view to long term sustainability, and vital to this is adopting a professional approach to your lettings business,’ she added.
This article was republished with permission from Property Wire.