In 2023, the United Kingdom has found itself grappling with inflation. The record-breaking rates of inflation mean that The Bank of England’s interest rate is currently standing at 5.25%.
What does the increase in interest rates mean for landlords?
Higher interest rates have inevitably led to higher mortgage costs, this has resulted in an unprecedented mortgage crisis that has heavily impacted the housing market and has left thousands of landlords facing significant challenges as they are directly exposed to these higher mortgage costs.
In a more immediate sense, landlords with variable mortgage rates are faced with higher mortgage repayments and this has led to a reduction in profitability of rentals. Landlords with fixed-term mortgages, will also inevitably face a loss in profits upon the expiration of their fixed-term.
According to the Telegraph, up to 225,000 landlords face losses on their rental properties in light of the refinancing costs jump.
With the attractiveness of renting out properties decreasing, many landlords are left with no other alternative but to sell their properties.
Why are Landlords facing issues with regaining their properties?
Amongst the stress of selling and refinancing properties, landlords are also faced with the intricacies of regaining possession of their properties.
Landlords can currently regain possession of their properties by evicting their tenants through the service of a ‘Notice’. Eviction may take place by serving a tenant with a valid Section 21 Notice (a ‘no fault’ notice), a Section 8 Notice or a Notice to Quit.
With the Renters Reform Bill in mind, the Government has confirmed its plans of abolishing Section 21 notices and bringing about many changes to tenant evictions which will add an additional layer of complexity to the process.
How can Jefferies Solicitors, Essex, help you?
We at Jefferies understand that this can be a stressful period for landlords. Our specialist team dedicated to Tenancy, are committed to helping you navigate through the technicalities of regaining possession of your property.
Speak with our team today by calling 01702 443 472, or by filling out a contact form to discuss the legal options available to you.
The contents of this article are for the purpose of general awareness only. They do not purport to constitute legal or professional advice. The law or information included in this article may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
