London landlords selling properties may disrupt rental markets

London’s housing market is facing challenges with skyrocketing rent prices and increasingly high mortgage rates. This situation has prompted some landlords to exit the market, potentially worsening the rental crisis in the capital, according to property experts.

Following the Bank of England’s increase in the base rate in June, landlord Paul Bradley experienced a £46 rise in the cost of his interest-only variable tracker mortgage.

Over the past three years, Mr. Bradley’s mortgage has tripled, going from £304 to £932 per month.

The tenant has been renting the flat in Enfield, North London, from the 74-year-old for just over £1,000 per month.

According to Mr. Bradley, these expenses, along with taxes, have left him significantly out of pocket, essentially subsidizing the tenant’s residence in the property.

He explains that he is currently facing a loss of approximately £250, resulting in a total of £300 per month.

Mr. Bradley intends to sell the flat; however, he mentions that the tenant has declined to vacate, necessitating his recourse to court in order to regain possession of the property.

While Mr. Bradley resides in the Midlands with his family, he retained the Enfield flat as a “nest egg,” he explained.

However, Mr. Bradley is currently facing arrears and admits that it is challenging for him to manage the situation.

He reveals that he is aware of other landlords who also have mortgages and are deciding to sell their properties.

Zoopla data indicates that approximately 4,000 homes owned by landlords have been listed for sale in London each month this year.

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London residents are already grappling with steep prices, intense competition for housing, and landlords demanding several months’ rent in advance due to a scarcity of available homes relative to the number of prospective tenants in the capital.

Following the Bank of England’s decision to increase its benchmark interest rate from 4.5% to 5%, the National Residential Landlords Association (NRLA) cautioned that hundreds of thousands of rental properties could be at risk of being lost, not only in London but throughout the United Kingdom.

The NRLA expresses concern that this could further worsen the ongoing supply and demand crisis within the private rental sector.

Source : bbc.com

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