There are two main ways that rising interest rates will affect buy-to-let property investors.

The first, as mentioned above, is that interest rates on mortgages will rise. Buy-to-let mortgages already have higher rates of interest than standard residential mortgages.

This will make BTL mortgages unaffordable for many would-be investors and will cause many to struggle to make their current repayments.

One effect that this may have is landlords raising their rent to generate enough income to pay their mortgages.

The second major effect this will have is more of a long-term one that will not have an immediate impact. Spending will likely fall across the housing market due to mortgage rates, which could cause house prices to fall.

In the immediate future, this is bad news for investors looking to sell their investment properties, as they will not benefit as much from capital appreciation as they would have.

However, this is actually good for the buy-to-let market, as not only will properties become more affordable to invest in, but this is likely to be only a temporary fall in prices.

Therefore, investors would be wise to hold onto their buy to let properties for longer than intended, to make a better return on investment once property prices had risen once again.

One thing this does mean is that off-plan properties are more viable than ever, thanks to the flexible payment plans they come with, meaning investors can avoid the costly interest rates of mortgages. You can read about some of the benefits of buying off plan property in one of our helpful guides.