The average monthly cost of a buy-to-let (BTL) mortgage has climbed by up to 64% over the past decade, according to Benham and Reeves.
The research took the average UK house price, which rose from £191,298 10 years ago to £267,957 today, up 40.1%.
Now, landlords need a mortgage loan of £200,968 after a 25% deposit of £66,989, compared to a £143,474 loan a decade ago.
The average BTL mortgage rate increased from 3.19% to 3.73%.
Monthly costs for a full repayment BTL mortgage went from £695 to £1,031, up 48.4% or £336 per month.
The biggest rise was seen in interest-only mortgages, which went from £381 to £625 per month, up 63.8% or £243 more each month.
Over a standard 2-year fixed term, landlords now pay £5,839 more in mortgage costs compared to 10 years ago.
Marc von Grundherr, director at Benham and Reeves, said: “The buy-to-let sector has faced a relentless stream of challenges over the last decade and landlords are now contending with substantially higher mortgage costs at the same time as sweeping legislative reform via the Renters’ Rights Act.
“While house prices have increased considerably over the last 10 years, higher borrowing costs have further intensified the financial burden facing landlords and this has been particularly notable for those utilising interest-only mortgages, which have traditionally formed a large part of the buy-to-let market.
“Many landlords have already absorbed significant increases in operational costs in recent years, from taxation changes and licensing requirements through to energy efficiency regulations and wider compliance obligations.”
von Grundherr added: “Despite this, the sector continues to demonstrate resilience because rental demand remains extremely strong and, in many parts of the country, vastly outweighs the level of available stock.
“Of course, there is a tipping point and continued upward pressure on costs will inevitably influence investment decisions across the sector.
“However, well-positioned landlords with quality stock continue to perform strongly, particularly within markets where tenant demand remains robust.”
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