Rising interest rates are just the latest in a litany of woes to upend the rental market – and few will be able to ride out the storm

Ben Wright and Ruth Bloomfield write in The Telegraph about "Why Britain’s buy-to-let dream is dying."

An average buy-to-let in England and Wales generates rental income of £12,000 and, after costs, a typical landlord would expect to clear a profit of £4,490, according to estate agency Hamptons. But, with mortgage costs going parabolic, this is set to fall to just £1,780 for basic-rate taxpayers and – wait for it – only £120 a year for higher-rate taxpayers.

The entirely understandable result has been a sharp increase in the number of buy-to-let landlords who are looking to sell their properties, according to a recent survey by the Royal Institute of Chartered Surveyors. There has also been a fall in the number of overseas investors to take their place.

Bank of England officials said last week that landlords were likely to keep raising rents in an attempt to cushion the blow of higher rates, but also added: “Falling profitability could, in principle, cause landlords to sell their property investments and exit the buy-to-let market. If this were to happen in large enough volumes, it could put downward pressure on house prices.” This, of course, could reduce the supply of properties available to tenants, further pushing up rents.


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