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Landlords Face Remortgaging Challenge as 40% Approach Renewal Deadline

A significant portion of UK landlords are on the brink of a remortgage decision, with research indicating that 40% are set to renew their mortgage rates within the next 7 to 12 months. The Mortgage Lender (TML) unveiled these findings after surveying residential landlords, revealing an imminent wave of remortgages. Furthermore, an additional 41% of landlords are expected to renew their mortgages in the subsequent two to three years.

Mortgage Landscape
The survey highlights a predominant preference among landlords for 5-year fixed mortgages, with 42% opting for this stability. Meanwhile, 21% are tied to 2-year fixed deals, and a smaller fraction face variable rate uncertainties, including 15% on Standard Variable Rate (SVR) mortgages and 8% on tracker mortgages. The latter group is particularly sensitive to immediate payment adjustments following shifts in the Bank of England’s base rate.

Economic Outlook and Strategies
Despite a recent dip in mortgage rates, they still hover above the low levels seen in the past decade. With the Bank of England’s base rate currently at 5.25%, the anticipation leans towards a rate decrease by the Monetary Policy Committee, potentially not materializing until late summer 2024. Landlords nearing their remortgage term expect an average monthly payment increase of £615, prompting various strategies to counteract the financial pressure. Plans include raising rents, as 30% of landlords indicated, budgeting for the hike, selling properties, or transitioning to more lucrative letting options such as HMOs or holiday lets.

Professional Advice Recommended
Chris Kirby, Head of Sales – Midlands, South & Specialist Distribution at The Mortgage Lender, emphasises the ongoing struggle against high inflation and the gradual approach to rate reduction. Kirby advises landlords facing remortgage decisions to consult with brokers for tailored mortgage solutions that align with their portfolio needs and the broader economic challenges. This guidance is deemed crucial in navigating the complexities of the current mortgage landscape and securing the most advantageous terms for property investments.


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