Buy-to-let investors affected more by mortgage mayhem than homeowners
Landlords will make a loss on new investments because of rising interest rates and stricter lending rules, Britain’s second biggest mortgage provider has warned.
Chris Rhodes, of Nationwide Building Society, told MPs that investors had borne the brunt of the mortgage crunch.
He said: “Buy-to-let has been hit hardest. Partly [because of stricter] stress tests but also interest rates on buy-to-let mortgages mean it’s hardly profitable for investors, if not loss making, to [buy] a new property.”
Mr Rhodes warned higher borrowing costs for landlords would make buy-to-lets unsustainable for the “medium term”, with landlords selling up and others passing on costs to tenants via higher rents.