Buy-to-let could be hit by rising costs

The effect of the credit crunch on house costs could cause a number of landlords to sell properties, resulting in a lack of rental homes, it has been claimed.

According to the Royal Institution of Chartered Surveyors (Rics), the rise in cost of arrangement fees have hit landlords hard, the Guardian reports.

Jeremy Leaf, spokesman for Rics, revealed that the upkeep of a landlords portfolio could increase greatly, causing many to sell.

He told the publication: "The situation is a mess and it is inevitably going to have an effect on the housing market and the wider economy,'

"It is a shame because it comes at a time when there is strong demand for rented property. Landlords should be getting more choice from the financial markets. A lot of lenders haven't passed that on because they are clearly trying to retain margins," he added.