Why a rise in interest rates isn’t all bad news for landlords
The Bank of England base rate has risen to 5.75%, with a further rise of 0.25% predicted this year. This has led to rising mortgage costs – but with some forward planning, this doesn’t necessarily mean disaster for landlords.
For existing landlords:
- Make sure you’re not paying too much for your mortgages. There are still some good mortgage deals around despite the rise in interest rates.
- Review how much equity you have in your properties and think about releasing some that equity before house prices fall. With cash in the bank you’ll be in a stronger position to negotiate when property deals arise. And you’ll also have something to fall back on in case of rental voids or bills for repairs.
- It’s a sad fact that rising interest rates lead to more house repossessions. There will also be more people looking to sell quickly. With money in the bank you’ll be an ideal position to negotiate a price below market value.
- As interest rates rise potential first-time buyers will he more wary about stepping onto the property ladder and choose to rent instead.
For new landlords:
- House prices will even out and perhaps fall, as interest rates rise. This is an ideal time to invest in property, with more potential for capital growth in the future.
- As the rise in interest rates bites, it’s a sad fact that some people won’t be able to afford their mortgage repayments and will want to sell as quickly as possibly. Make sure you have your finance in place so that you’re in an ideal position to negotiate.
- As interest rates rise potential first-time buyers will be more wary about stepping onto the property ladder and choose to rent instead, expanding the rental market.
- Shop around for your mortgage finance and use a specialist buy-to-let broker. With people being more cautious about taking out buy-to-let mortgages the competition between mortgage providers is fierce.
Leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
No comments yet.
Leave a comment