Friday 18th May 2007
Holders of buy-to-let mortgages are raising rents to recoup profits lost due to recent base rate rises, it has been claimed.
According to mortgage provider Paragon, the average rent on a buy-to-let property has increased by 6.5 per cent over the last quarter in accordance with the 0.5 per cent rise in the Bank of Englands base rate since the start of the year.
Nigel Terrington, chief executive of Paragon, warned that those already in rented accommodation may not escape higher costs by renewing existing agreements.
"With demand for rented accommodation as strong as ever, landlords are able to increase rents on existing tenancies when they are renewed and apply a higher rent to new tenants than they would have charged previously," he advised.
Meanwhile, homeowners were warned by Post Office this week that they could be "throwing money away" by taking out contents insurance from their mortgage provider.
"Our advice is shop around as there are better home insurance deals out there from standalone providers," said head of insurance Phil Ashkuri.
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