Landlords need to prepare!
The vote was 5-3 in favour of keeping Bank of England base rate on hold but the last time three member of the MPC voted for a rise was in May 2011.
So, if history is to repeat its self landlords need to be prepared for a future rise in Bank base rate. At this time the economy is fragile, the government is weak and there is a wealth of uncertainty over Brexit. With these fragile conditions mortgage interest rates may rise in the near future and landlords would be well advised to review any standard rate mortgage they currently have.
In a speech at Mansion House on the 20th June, it would appear that the governor of the Bank of England, Mark Carney has a warning “From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin the adjustment”. “But this could change in the not too distant future”.
No doubt this currently is welcome news for UK landlords, who are much beleaguered by the swathe of financial penalties they have been hit by of late.
Nonetheless landlords should without doubt prepare, as a further adjustment to investment strategy may be necessary if there is an interest rate change.
For landlords, an interest rate rise would place more pressure on their business model and reduce profitability even more. It is highly recommended for every landlord to plan ahead, make any revisions necessary to your strategy and then utilise the expertise of a specialist mortgage broker to identify a suitable product to meet your long-term needs. The next vote will take place in under two months’ time on 3 August.
Can we help?
If you would like to review your current mortgage or require advice on a new one please do make contact and one of our advisers will be happy to assist.