Shock poll finds 44% of landlords will sell up

If interest rates rise to 4.5% next month, 45% of landlords say they will sell up, a survey reveals.

The findings from Finbri highlight that landlords are gearing up to bail out if the base rate increases in May.

But financial experts are predicting that rates will go up and inflation remains stubbornly above 10%.

And some financial wizards are predicting that rates could even be hiked to 5%, Finbri says.

Even worse, some are predicting rates will hit 5.25% by the autumn.

‘Significant burdens on private landlords’

The firm’s Stephen Clark said: “The combination of rising interest rates, successive hostile legislative and regulatory changes places significant burdens on private landlords.

“Unsurprisingly, large numbers of private landlords are selling up and exiting the UK rental market.

“With reduced rental stock in the market and booming demand, those properties that are available have even higher rents which is a source of great concern for renters.”

Increasingly likely that rates will reach 5%

The big issue is that interest rates had been predicted to remain at 4.5%, at least until the summer, but it appears increasingly likely that rates will reach 5% in May.

As a result, nearly half of landlords will look to sell their properties and look elsewhere for better returns – including alternative investments for 45% of those selling up.

Finbri also found that 52% of landlords will raise rents after an interest rate rise.

Now, the private rented sector will be nervously watching the next Monetary Policy Committee (MPC) of the Bank of England when it meets next month.

If the MPC does raise the base rate, it will be the for the twelfth consecutive time as they strive to reduce inflation to its goal of 2%.

Inflation dipped in March

And while inflation dipped in March, it remains persistently high at 10.1% – and one of the worst rates of any large advanced major economy.

A rate rise will also raise the spectre of recession and restrict the economy’s ability to grow.

House prices are also set to be hit as mortgage rates once again return to their upward trajectory.

The survey also chimes with another Finbri poll that found that renters are increasingly nervous that their landlord will sell up if rates rise.

The findings show that 31% of tenants worry about their property security – and 15% of renters worry about losing their homes, so their fears may be justified.

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