According to Moneyfacts, a data company, the average quoted rates for two-year and five-year fixes are now 6.84pc and 6.78pc. These rates are likely to climb further, although perhaps more slowly if Mr Hunt is able to calm the markets.
Chris Norris of the National Residential Landlords Association, a trade body, said: “Costs are going up at a faster rate than they have in living memory. Landlords’ margins aren’t high enough to absorb the increases that we expect in the next couple of years.”
Government policy is a further blow. The last time rates were this high, landlords were shielded by tax relief on buy-to-let mortgages, Mr Norris said. Since 2020, this support has been removed.
Gertie Owen, 63, has 45 tenants in houseshares in London and Newcastle. For the first time she increased the rent for sitting tenants by 5.5pc this year. If she takes on new tenants, she will raise the rent by another 10pc, she said. Three of her properties are on fixed-rate deals that are coming to an end. She has been paying 3.4pc but expects to remortgage at 7pc.
Her tenants pay rent that includes bills, which means she also has to shoulder soaring utility costs. The blow has been amplified because Ms Owen can no longer offset all of her interest payments against her tax bill.
Since 2020, the majority of landlords taking out mortgages have done so using a limited company, which means they can still offset their interest payments against their tax bill.
But in 2018 and 2019 the majority were buying as individuals – and it is this group that will be coming to the end of their five-year fixed-rate deals in 2023 and 2024.
