Shares in buy-to-let mortgage lenders fall after report Reeves plans rent freeze

Chancellor Reeves’s proposed one-year rent freeze to shield households from Iran war costs triggers sell-off in buy-to-let lender stocks. | Contesto: cronaca

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• Shares in buy-to-let mortgage lenders fall after report Reeves plans rent freeze

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Shares in two of the UK’s largest buy-to-let mortgage lenders tumbled on Tuesday after it emerged that Chancellor Rachel Reeves is considering a one-year rent freeze for private landlords in England, a move designed to protect households from rising living costs linked to the war in Iran. FTSE 250 firms Paragon and OSB Group — the owner of Kent Reliance and Precise Mortgages — both slid on the London Stock Exchange following the Guardian’s Monday night report that Reeves is weighing a temporary ban on rent increases. The sell-off reflects investor fears that capping rental income would squeeze landlords’ margins and potentially increase default risks on the loans that underpin the buy-to-let lending market. The proposed freeze is part of a broader government effort to limit the economic fallout from the Iran conflict, which has already pushed up energy bills and broader inflation. By halting rent hikes for a year, Reeves aims to prevent a further spike in household costs that could deepen the cost-of-living crisis. However, the plan has sparked immediate concern among lenders whose business models rely on landlords’ ability to pass higher costs on to tenants. Paragon and OSB Group are among the most exposed to the buy-to-let sector, which has already faced headwinds from rising interest rates and tighter regulation. Analysts noted that a rent freeze, even temporary, could reduce landlords’ cash flow and make it harder for them to service their mortgages, potentially leading to higher arrears or a pullback in new lending. The government has not yet confirmed the policy, and any final decision would require legislation or regulatory action. Reeves’s team is said to be consulting with housing and industry groups to assess the impact. The Treasury declined to comment on the report, but insiders suggest the chancellor is weighing the measure as a targeted intervention rather than a broad price control. If implemented, the freeze would mark one of the most direct government interventions in the private rental market in years. It would also test the resilience of buy-to-let lenders, which have already seen profitability squeezed by higher borrowing costs and a cooling...

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Categoria: cronaca