Interest rates and Buy to let?

[ivegotdreadfulpmttoday]

I'm pondering the effect of increasing interest rates on BTL properties and the tenants who live in them.
Will rents just go up and up as landlords struggle to service their debt?
Will their be lots of forced sales? Would this then result in evictions?
Will rented properties become less maintained due to landlords not having the cash to carry out repairs?
This sounds like a bad thing for landlords and tenants. Only the banks will gain. Or is there another perspective?

Rents are already exploding due to inflation and demand. We have a few rentals and one became vacant. It needed a refurb and update which was astronomical in cost compared to another three years ago. We needed to put the rent up (considerably) to recoup some of that. Even so, within a couple of days there were 20 prospective tenants all outbidding each other in an attempt to get it. The easiest way to filter them down is increase the rent further which we chose not to do as we picked a tenant we thought would be a longer term stay, look after it and importantly no dogs !!

Unfortunately the hostile tax regime to landlords is just limiting supply and meaning even more people can't find a home to rent. Usual unintended consequences from rash government policy

Thanks. Interesting. Are you worried about interest rates as well?

There will be more of this

www.bbc.co.uk/news/uk-scotland-scotland-politics-62807578

tenants will be staying in bank owned properties while the courts slowly deal with evictions and pursue the landlords for the debt. You can walk away from a tenancy, but you can`t walk or even run away from a stupidly large mortgage debt.

Not so much worried re interest rates as we no longer have any finance on them. However, factors are for others the interest rates, inflation and the hostile tax regime to buy to let is driving up rents massively. To us, costs of repairs is a factor as they have doubled/tripled in price in 3 years.

I think the government really have got their approach wrong as many property owners are chucking it in and selling so the rental market is diminishing, thus driving prices up even more. We have always prided ourselves on provided too quality accommodation to tenants wanting a longer term let at a reasonable price. If I advertised one of our houses at rents being charged 2 years ago I would have 100 enquiries so price is now becoming a filter. No doubt the next step will be some form of rent control to try and offset these changes and then landlords really will sell up. Rents around us are gone up at least 40% in the last two years and a factor in that is also the number of tenants that jus5 refused to pay during covid and couldn't be evicted, even though they could actually pay!!

Im confused, if rents are up 40% why dont people want to be landlords, and if mortgages are much more expensive AND people dont want to be landlords anymore, who is going to buy up all the 1 and 2 bedders when landlords try to exit? Of course if you are in Scotland it looks like you cant exit until the government says you can..........could this cause a crash in 1/2 bed flats in Scotland?

Because a combination of all tax changes, mortgage increases for buy to let and cost of repairs and enhancements have easily taken a lot if the rent increases as most landlords will have finance on the property.

The government posed the tax increases as doing the housing market a favour. That didn't translate to any favours for those that wanted and needed to rent.

The other perspective is many landlords aren't drowning in debt, have paid their mortgages long ago, maintain their properties, are cash rich and don't face any of the issues that over endebted landlords do.

If landlords can't pay and are repossessed or forced to sell those properties don't dissappear in a puff of smoke. If they will not sell at current prices, they will naturally be reduced. At which point they will be either bought by cash rich landlords/investors or the previous renters that can now afford to become owner occupiers.