Preparation needed for landlords

Although interest rates are to levels last seen in the seventeenth century, mortgage experts warn that it is only a matter of time before rates begin to rise again, bringing a new financial crisis for buy-to-let landlords.

Residential landlords with buy-to-let loans must prepare themselves for possible rate hikes, which may come during the second half of the year. Most at risk are landlords with tracker or flexible rate mortgage contracts, as they would feel rising interest rates first. Some of these landlords have benefited from not being locked into a high rate over the past several months, but this could be short lived. Landlords who intend to re-mortgage later this year are also at risk, as they would have to pay higher rates.

Landlords enjoy exceptionally low interest rates on their buy-to-let loan and must not be “lulled into a false sense of security in the hope that the market will bounce back,” even if interest rates do increase.

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March 18^th 2009

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