If you’re a landlord with a fixed-rate mortgage nearing the end of its initial term, you’ll only be too aware of the coming increase in your monthly repayments.
Back in October 2021 and 2018, two and five-year buy-to-let fixed rates averaged around 3%, but they’re now switching to today’s rates of more than 6% - a substantial jump!
This rate hike has caused many landlords to sell up, and you might be thinking of doing the same. However, before pulling the plug on your investment, there are some options to explore, including:
So, if part of your reason for being a landlord is future financial security for you or your family, you’ll find plenty in this week’s blog to help you make the best decision for you.
Many rental homes never reach their full income potential because they don’t attract the highest-earning tenants, so it’s worth exploring whether you can boost your income.
For detailed inspiration on elevating your buy-to-let to the most stylish, modern and profitable home it can be, take a look at our blog on Rental Upgrades.
Despite rents soaring in the last couple of years, many landlords have frozen the rent for existing tenants to prioritise stability. Of course, this can be a smart business move, but not if it ruins your own finances.
Talk to local letting agents about the current rental value for properties like yours, and bear in mind that the laws for rent increases are different in England & Wales to those in Scotland and Northern Ireland.
Rent increases are always sensitive, but you can make them easier by offering more security to tenants you want to keep, perhaps by offering to freeze the rent for two years after the increase kicks in. And remember: you serve no one if you can’t afford to keep your buy-to-let and need to sell, because removing it from the rental market only makes it harder for tenants to find a home.
Have you ever heard the poem that includes these lines? “If you can keep your head when all about you are losing theirs… yours is the Earth and everything that’s in it.”
While Rudyard Kipling wasn’t writing about the trials of being a landlord, it’s sound advice for looking beyond short-term ups and downs in favour of long-term thinking.
Yields haven’t been this high for years, so buying up rather than selling up will give you immediate results as well as long-term security.
Landlords can’t control buy-to-let mortgage deals, but you can explore ways to soften the blow of higher interest rates and make your rental homes more profitable and sustainable. Possible solutions include:
It’s surprising how a thorough review of all your outgoings can provide multiple opportunities to make your business more viable and comfortable to run every month.
Many landlords have exited buy-to-let, but we’re not sure it’s always the best move. Costs like Capital Gains Tax and selling fees eat into profits, while few other investments are as stable as property.
However, if you do decide to sell, we’ve listed your most likely options below.
If you’re considering selling your rental home in the Wilton & Salisbury area, talk to us first. We may be able to help you boost your income, or we could have another landlord who’ll buy your property straightaway.
Are you weighing up your future as a landlord?
There’s a lot to think about right now, and having a sounding board for all your thoughts and concerns can help you find some clarity - so why not use us?
Call us on 01722 580059 or message us at email@example.com for a no-strings chat about everything and anything landlord.
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