A Fifth of Landlords Would Sell-Up or Invest Abroad if Interest Rates Hit 6%

Published 01st Oct 2007

An Ezylet survey reveals that three quarters of residential buy-to-let property owners would be affected by 6% interest rate – 41% expect profit margins to disappear

A new survey from property lettings specialists Ezylet, has today revealed that a fifth of landlords in Great Britain (20%) would seriously consider selling one or more of their property investments, or invest overseas (19%) if the British interest rate were to rise above 6%. The report, ‘Challenges for the Great British Landlord’ also suggests that 8% would get out of the buy-to-let market altogether and 41% would expect their profit margins to disappear.

Myak Homberger, Marketing Director at Ezylet explains, “Between interest rates squeezing profit margins and agents taking large fees, there is an obvious demand for services that support landlords and help to reduce some of their overheads. Ezylet for example, not only connects landlords and tenants free of charge, but provides a multitude of useful tools such as a portfolio management system and a network of useful trades’ people, as well as useful information about utilities, finance and insurance. Buy-to-let property investment has become extremely popular in recent years – attracting many ‘first-timers’ as a way of supplementing their income or pension arrangements. So, it’s critical that we work closely with organisations such as The National Landlords’ Association to find ways to better support them.”

Landlords that own and manage their own properties have an average of five domestic properties in Great Britain. 36% have two or three properties and 28% have four or more. Homberger continues, “This means that more landlords will feel a tight pinch from a 6% interest rate, than won’t.”

According to Ezylet, in some parts of the country, the investment being made by buy-to-let landlords has been instrumental in the general improvement of property in the local area, and there is little doubt that this has led to an increase in many property values. Therefore, a downturn in buy-to-let property investment could have a wider social impact.

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