UK landlords pay £15bn in mortgage interest per year

This figure has increased by 40% (or £4.3bn) over the past 12 months, and 58% (£5.5bn) since it bottomed out in November 2021.

The uptick is attributed to higher interest rates, with nearly 70% of investors relying on mortgage finance to fund their BTL business — with the vast majority on interest-only deals — according to Hamptons.

As investors roll off their cheaper rates, the total amount they are paying in mortgage interest is skyrocketing.  

The expiration of fixed-term deals and the increase in tracker rates are also not improving the current situation for BTL landlords. 

As landlord’s low-rate deals continue to come to an end, this £15bn figure is likely to carry on rising in the future — even if mortgage rates remain close to their current standing.

In September, rents grew at a double-digit pace in most regions, but not enough to offset the average mortgage rate of 3.4% seen in August.