“Increasing rates will undoubtedly lead to higher rents and, as some landlords exit the market, a shortage of private rented homes.”
While most landlords with buy-to-let mortgages will have fixed rates for two or five years, the increased cost of higher mortgage rates will feed through at some point, Mr Stewart added.
Pandemic arrears and the Government’s buy-to-let tax crackdown sparked an exodus of landlords from the South in favour of the higher rental yields available in other parts of Britain.
Recent analysis by Hamptons International, the estate agent, found investors had sold properties in southern England, where rents are low relative to house prices, and bought higher-yielding locations in the North and Midlands.
Paul Mahoney, of Nova Financial Group, a property adviser, said this change of tack would be sharpened by any increase to mortgage rates. “I doubt a slight rise would affect those landlords with high-yielding portfolios in the likes of the Midlands and North.
“There is plenty of time to plan around a rate change and there is still plenty of choice for landlords. It wouldn’t spell the end for investors,” he added.