The majority of landlords in Britain are only paying the interest on their mortgages rather than paying off their loans, research suggest.
According to the National Landlords Association (NLA) some 79% of landlords are only servicing the interest on their mortgages and it is due to rising costs with many being taxed out of business.
The NLA points out that there are many costs to running a successful lettings business that tenants are even the wider industry are either unaware of or don’t consider.
‘There are myriad costs to running a letting business, including maintenance, repairs and upgrades, licensing, and insurance. Rents have to cover all these costs, as well as the interest on a mortgage, where there is one,’ said Richard Lambert, NLA chief executive officer.
‘Housing is expensive for everyone at present. The Government needs to encourage the supply of housing in all tenures, including the private rented sector,’ he added.
The NLA is calling for the Government to allow more time, five years, for existing policies in the private rented sector to bed in, and evaluate their effectiveness, before new policies and regulations are introduced.
It also suggests that the Government should be encouraging the building of more housing of all tenures by simplifying planning and borrowing rules.
Crucially, it says the Government should stop taxing professional landlords out of the market and argues that the loss of ‘good landlords’ will not make renting more affordable and will simply drive up the cost for those who want to access decent rented homes.