What can landlords expect this year? As spring finally makes an appearance, it’s a good time to assess how the rental market might perform for existing landlords and new buy-to-let investors in 2023.
We’ll share insights on:
- What effect will rising interest rates have on the rental market?
- What are the current buy to let mortgage requirements?
- Can we expect any changes in the energy efficiency requirements for rental properties?
How have high mortgage costs affected buy-to-let landlords?
Since the beginning of the year, high interest rates have dominated the headlines. The rising cost of mortgages has been a setback for mortgage-dependent landlords. But higher rates have also driven a lot of would-be first-time buyers back to renting, pushing up rental prices as tenants compete for available properties.
As a result, we’re expecting to see a further rise in enquiries for rental properties this year, with rents rising to reflect demand. Despite recent market volatility, it seems most landlords are holding tight.
Research by mortgage company Landbay has revealed that seven out of ten landlords don’t intend to sell a property from their portfolio in 2023.
What’s happening to BTL mortgages in 2023?
Although interest rates remain high, they have now fallen some way below last year’s peak. In February, the rate stood at 5.91 per cent. That’s considerably lower than the November peak of 6.76 per cent but still higher than the rate recorded twelve months ago (3.2 per cent).
The consumer body Which? expects the average BTL mortgage rate to continue to fall, although they say it is difficult to predict how far the rate will drop. If you are new to buy-to-let investment, make sure you are up to speed on buy to let mortgage criteria before you calculate how much you could borrow. Or if you are an existing landlord looking to remortgage a buy-to-let property, a good mortgage broker can direct you to the best deals available on the market.
Are government laws on the energy efficiency of rental properties about to change?
The government is set to introduce a raft of new laws affecting landlords, including a change to the EPC rating for rental homes.
Currently, you need a minimum rating of E to rent out a property, but from 2025 all new tenancies must have a rating of C (the deadline for existing tenancies is 2028).
So there’s never been a better time to consider ways to increase the energy efficiency of your rental property.
If you are an existing landlord, you still have time to carry out work that will bring your property up to the required rating. If you’re a new BTL investor, ensure that any property you buy to rent out have that all-important C rating.
Our estate agents in Ilford and Barkingside are always happy to help our landlords get the best out of their rental properties. Our property managers are a super efficient, friendly team who offer truly local service.
Why not give our lettings team a call?
Give us a call at 0203 972 7341 or email info@oaklandestates.co.uk.
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