UK buy-to-let investors warned of mayhem

[LONDON] Shahram Kordestani, who owns seven UK rental homes, has advice for investors eager to join the swelling ranks of landlords: Do so at your peril.

Mr Kordestani, who has been renting homes in London and south-east England for about 12 years, said when interest rates rise, the jump in mortgage payments will hammer buy-to-let investors who have helped push up property values. "There is going to be mayhem," said Mr Kordestani, 52. "Whoever pays those prices is going to suffer."

The loan-to-income cap that Bank of England (BOE) governor Mark Carney introduced last month to cool Britain's housing market does not apply to buy-to-let - the fastest-growing type of mortgage by value.