Buy-to-let landlords are hit again – this time by an increase in the Bank of England base rate to 4%
Buy-to-let landlords have been hit again – this time by an increase in the Bank of England (BOE) base rate to 4%, say leading audit, tax and business advisory firm, Blick Rothenberg.
Heather Powell, a partner at the firm, said: “Buy-to-let landlords will be looking carefully at their finances, as they will now need to factor in higher mortgage costs in their investment appraisal following today’s increase in the BOE base rate to 4%.”
She added: “This is on top of the additional 4% income tax on their rental profits they will need to pay from April 2027, which was announced in the chancellor, John Healey’s inaugural Autumn Budget.”
Heather said: “The Rental Reform Act means that landlords cannot automatically pass these additional costs on to their tenants – they are now only allowed to increase rents once a year, and if the tenant believes the rent increase is out of line with the local area they can appeal to the Courts who will rule on whether it is fair of not. Recent rulings under this regime have gone in favour of the tenant – and in some cases has resulted in a reduction in rent.”
She added: “Buy-to-let is increasingly less attractive as an investment, and those who already own buy-to-let properties are selling up. The net result will be a reduction in rental properties and, in the long run, an increase in rents due to a shortage of supply.”