Writing in the Propert118, David Coughlin advises ‘Cut your losses says landlord: Why this month’s mortgage rates are causing landlords to sell‘

The article can be seen here, and in summary says that recent news has presented mixed signals for landlords deliberating on whether to downsize or expand their property portfolios. While some potential relief is in sight, the overall landscape remains challenging due to rising Buy-to-Let (BTL) mortgage rates.

Rising BTL Mortgage Rates

BTL mortgage rates, which dropped to 5.5% in February, have been climbing again. As of early July, rates averaged 5.55%, significantly higher than the 4.31% from two years ago . This increase spells trouble for landlords remortgaging after two-year deals, as their repayments will rise sharply.

Emma Jones, a mortgage broker, highlighted the impending “payment shock” for many landlords moving from ultra-low rates to current higher rates. According to a BBC report, approximately 400,000 properties could see monthly payments jump by 50% or more.

Considering Selling as a Solution

In light of these financial pressures, many landlords are contemplating selling some or all of their properties to manage their portfolios better and avoid financial losses. Selling properties, particularly the lower-performing ones, can help landlords streamline their portfolios and reinvest more profitably elsewhere.

Case Study: Darren’s Successful Portfolio Sale

Darren, a landlord in Liverpool, decided to sell his properties due to mounting frustrations and financial pressures. After considering various agencies, Darren chose to work with the Landlord Sales Agency, convinced by their comprehensive approach and track record.

Darren initially listed 14 properties with the agency in January. The properties sold quickly, with the first batch going immediately after the first viewing and others within 27 days. The agency successfully navigated challenges such as tenant issues, property repairs, and illegal subletting to ensure a smooth sale process.

Satisfied with the outcome, Darren decided to sell additional properties through the Landlord Sales Agency. He has since listed another 40 properties owned with his brother, further demonstrating his confidence in the agency’s capabilities.

Conclusion

Landlords are facing tough decisions in the current market due to rising BTL mortgage rates. For those feeling the strain of higher repayments, selling some properties to maintain a leaner, more profitable portfolio may be a viable solution. Darren’s experience shows that with the right agency, landlords can successfully navigate these challenges and achieve their financial goals