Property price decline could hit landlords

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Residential landlords could be in for a tougher time ahead as property prices look likely to decline.

Paul Holmes, chief executive of property website Firstrung, predicted that house prices in the UK may correct by 35 per cent over the coming three years, as higher interest rates and a slowing economy take their toll.

"Now all the cheap credit has been stripped from the market, there is now only one fundamental that is going to underpin this market, and that is what people can afford: what they can afford to rent, which has a knock-on effect of how much a buy-to-let investor will pay for a property, and what they can afford to buy," he said.

"The fact it will fall is not worth debating: it will."

Mr Holmes also stated that "house price inflation, as a phenomenon, is over for this generation".

Nevertheless, it is not all doom and gloom. FionnualaEarley of Nationwide told the Times that interest rate cuts and high tenant demand were likely to keep the buy-to-let sector profitable.

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