Mortgage interest rates have been a hot topic in recent months and a major worry for home owners, buyer and Buy-to-Let landlords alike with Bank of England raising base rates to 3% on November 3rd 2022. The rate has steadily increased from an all time low of just 0.1% during the Covid pandemic.
With increases in the Bank of England base rates and turmoil in the UK financial markets, we saw many mortgage products removed and interest rates hikes for new and remaining products.
The turmoil eased following the resignation of Liz Truss as prime Minister and Jeremy Hunt taking on the role of Chancellor of the Exchequer. The Chancellors Autumn Statement eased pressure further. This seemed to steady the markets somewhat and long term interest rates fell slightly.
On 10 November 2022, The Nationwide Building Society announced that some fixed rate and tracker mortgages would be cut by up to 0.70%. While this would mainly benefit residential, home owner loans, it helps to instill some confidence in the market with the hope that other products will follow and other companies reduce rates in a bid for new customers in a competitive market.
Good News For Landlords?
Buy-To-Let products may well be cheaper over the coming months and encourage Landlords to retain rental properties where they were considering disposal or attract new landlords to the market. This would of course have a beneficial effect on the availability of rental properties and reduce the upward pressure on rents. This can only be good news for both Landlords and Tenants alike.
Concern For Landlords and Home Owners
Whilst there maybe signs that interest rates could be falling slightly, it is more likely that, overall, rates will stabilise rather than fall significantly. There is, of course, still the issue of high inflation and if this were seen to increase over the coming weeks, the Bank Of England are likely to increase base rates again, increasing pressure on banks to increase mortgage rates.
Whilst the overwhelming view is that inflation will decrease over the coming months, helped by the governments Energy Price Guarantee and other aspects, the volatile situation in Ukraine and pressure on energy prices could see the rate increase further. Added to that the increase in the Energy Price Guarantee from April 2023 and many essential service wage demands from nurses, railway workers and other sectors, there could be further price increase pressures which may force the Bank of England to act. Therefore, whilst there is some good news, care should be taken when deciding on new mortgages and borrowing levels.
Help with Cost of Living, Become a Landlord
Many people will still suffer severe cost of living problems regardless of any interest rate falls and may look for options to reduce outgoings or increase income. One option for home owners or tenants alike who have a spare room in their home is to rent the room to a lodger. This can bring in much needed extra monthly without any tax implications under the governments 'Rent a Room Scheme'.
So, whether you are a individual looking to rent a room in your home home or a Landlord with a number of properties, why not register with us now to advertise your rooms.