What does first interest rate rise in a decade mean for investors?
- 24th November 2017
- Buy-To-Let Property News
BTL investors may need to consider what action to take as Bank of England ups rate by 0.25%
The Bank of England’s recent announcement interest rates were to rise by a quarter of a percentage point to 0.5% was unsurprising and yet still somewhat unsettling in equal measure.
Unsurprising because we’ve all known that interest rates couldn’t stay at record lows forever and a rise had been long-signalled. Slightly unsettling because, after a decade of record low rates (of just 0.25% since August 2016), the reality of an increase has now finally materialized.
That doesn’t mean there’s any need to panic. Rates are unlikely to shoot up rapidly in the near future. However, now is a good time for BTL investors to re-assess their portfolio position, and consider whether it’s time to fix mortgage rates while there are still some good offers around.
Rates are still very low by historic standards. Variable rates may have provided rock bottom interest payments for years, but now fixing is likely to come to the fore, to help lock in low rates and provide certainty. If you are coming to the end of a fixed-rate deal, planning ahead to get the next fix-rate product agreed as soon as possible could be sensible.
Stephen Ludlow, Chairman at ludlowthompson, comments: “Rates aren’t going to go down, so considering all the options now makes a great deal of sense and fixing looks like a smart move. Buy-to-let investors will want to keep an eye out for the best deals.”
“For investors who are keen to secure and maintain long-term tenancies, fixing onto a two- to five-year rate now should fit with the overall investment strategy."
For those individuals interested in talking about getting a new mortgage please contact Chris Lockey at Jigsaw Mortgages here.
Rates aren’t going to go down, so considering all the options now makes a great deal of sense and fixing looks like a smart move
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