40% Of Landlords Face Buy-To-Let Mortgage Renewal In 2024

by | Tuesday 26th Mar 2024 | Mortgage News

40% of landlord need a Buy-To-Let Mortgage Renewal in 2024

40% of landlord need a buy-to-let mortgage renewal in 2024

In the coming months, a significant portion of residential landlords with mortgages are set to face the challenge of securing new competitive buy-to-let mortgage renewal rates, according to recent research conducted by The Mortgage Lender (TML). With mortgage rates still increasing but rental property more in demand than ever, what can a landlord to do capitalise on the earning potential in 2024? In this blog we will explore the data released by TML this morning and also how getting help from a qualified and experienced buy-to-let mortgage broker might be just what you need.

40% Of Landlords Face Buy-To-Let Mortgage Renewal In 2024

The study from TML reveals that 40% of residential landlords with a mortgage, spanning fixed, tracker, or discount deals, are scheduled to renew their mortgage rates within the next 7 months to a year. This finding highlights the imminent financial decisions looming over a substantial segment of property investors across the UK. And perhaps the apprehensions that are causing some landlords to sell their properties and enjoy a much less volatile income lane. TML’s survey also delved into the sentiments prevailing in the current market among residential landlords. Apart from the immediate renewals, an additional 41% of landlords will also face mortgage renewals within the following 2-3 years.

TML’s study interestingly highlights the trends in buy-to-let mortgage structures that UK residential landlords have opted for over the last few years. Notably, the majority (42%) are currently on 5-year fixed-rate mortgages, while 21% are on 2-year fixed deals. Meanwhile, 15% are on Standard Variable Rate (SVR) mortgages, and 8% have opted for tracker mortgages, potentially exposing them to immediate changes in monthly payments tied to fluctuations in the Bank of England’s base rate.

Buy-To-Let Mortgage Renewal And Rates

Despite recent declines, mortgage rates persist at levels higher than those witnessed over much of the last decade and in recent weeks many lenders have actually increased rates, with the Bank of England base rate currently standing at 5.25%. Forecasts anticipate a gradual reduction in rates by the Monetary Policy Committee (MPC) with the next drop expected in April 2024, although significant adjustments might not materialise until late summer 2024, leaving borrowers with crucial decisions to make regarding their mortgage arrangements.

For landlords facing mortgage renewals in the upcoming year, the prospect of increased monthly payments looms large. On average, these landlords anticipate a £615 rise in their monthly mortgage expenses. Consequently, many are contemplating various strategies to manage the heightened financial burden. Including of course increasing rent for their loyal tenants which many landlords would rather avoid and also selling property.

According to the survey findings, 30% of landlords plan to mitigate increased costs by raising the rent of their properties, while 23% have already factored in these anticipated increases into their budgets. Additionally, 14% are considering selling their properties, while an equal proportion aims to convert them into Houses in Multiple Occupation (HMO) to secure better returns. Meanwhile, 13% are contemplating converting their properties into holiday lets.

Chris Kirby – Head of Sales At The Mortgage Lender

Chris Kirby, Head of Sales – Midlands, South & Specialist Distribution at The Mortgage Lender, emphasises the importance of proactive financial planning amid evolving economic conditions. Kirby advises landlords to seek guidance from brokers to identify the most suitable mortgage options, ensuring the preservation of their property portfolios amidst the persisting challenges posed by rising living costs.

Kirby states, “With many due to remortgage this year, it’s important landlords speak to a broker to find the most suitable mortgage for them in order to maintain their property portfolios, particularly as costs of living challenges continue. Brokers can offer invaluable support and guidance to help provide a holistic view of what deals are most suitable for clients before they rush into any decisions.”

Speak To A Buy-To-Let Expert If Your Mortgage Is Coming Up For Renewal

The best thing to do if you are a landlord with a mortgage coming up for renewal is to speak with a specialist buy-to-let mortgage broker. Even if it is just to get some advice on the best way to re-mortgage your property and not make a loss. Our team at Oportfolio are experts in buy-to-let loans. Give our team a call today for a fee free initial mortgage consultation. We are here to help.

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If you have any questions about UK mortgage news or or anything you’ve read then please get in touch. We’d love to hear from you.

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