News from Manor Lettings
14 April 2010: Residential landlords expect interest rates to rise by early 2011
Nearly all residential landlords in Britain expect interest rates to rise by the beginning of 2011, despite the fact that the Bank of England recently decided to keep its historically low base rate at 0.5%. According to research conducted by the Young Group, 94% of landlords believe that rates will increase over the next several months, but most do not expect significant interest hikes before 2011. On average, landlords estimate that the base rate will climb to 1.25%, indicating that landlords do expect a slightly sharper increase than the 1.1% anticipated at the end of 2009.
One in ten landlords expect a sharper rise in the base rate, thus leading to the more significant increase in the cost of buy-to-let loans. Ten percent of landlords responded that an increase of 2% is to be expected, but only 1% feared that the base rate might climb all the way to 3%. Most observers also suggest that it will take some time for the base rate to rise significantly and to return to previously seen levels of 5%. As such, landlords who have liquid cash may find that this is the ideal time to secure a buy-to-let loan, especially in light of imminent interest rate hikes.
The evidence is tentative at this stage and clearly there is a long way to go but it does seem to suggest that we have seen the bottom of the buy-to-let slump and that things are starting to get better.There are some signs that a large number of London area landlords (49% according to the Young Group‘s surveys) are intent to expand their portfolios with new residential property purchases. Just over one fifth of investors are also pondering purchasing properties in other regions of the UK over the next 12 months.
Source: http://www.rla.org.ukIf you would like to know more about our services and how we can help you why not register your interest?
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