A couple of weeks ago, I mentioned how the Bank of England has
been indicating recently that UK interest rates will be going up in the not too
distant future. Therefore if you are one of the 19,556 homeowners in Solihull
who has a mortgage, it may be worth considering your options and start to
budget for an interest rate rise. However if you are a landlord who owns one of
the 4,820 rental properties in the town, whilst your exposure to interest rate
rises is lower it is most certainly something you should be aware of.
Since the spring of 2009, British interest rates have been
at a record low of 0.5%. It’s not a case of if, but more when, they will rise.
Some people think it will be before Christmas, although I believe it will be early
in to the New Year around Easter time when they do rise. I also expect that the
increase will be slow, steady and limited. It depends on what happens to UK wage
rises, UK inflation and the general state of the British economy. Nevertheless as
much as we would love to pull the shutters and ignore what’s happening in the
world, we have to recognise that we are part of a global economy and global
economic issues prevent an abrupt and instantaneous rise in interest rates.
Those Solihull landlords who do have a mortgage, need to
remember that as interest rates rise and their monthly mortgage costs rise, it’s
easy to say you will look at your mortgage next month, before you know it
Christmas will be here! Don’t forget mortgage
lenders will remove the juicy low rate mortgage deals a few months before an
interest rate rise. Speak to a qualified mortgage advisor, there are lots of
them in Solihull and seriously consider fixing your mortgage rate now. You didn’t buy your Solihull buy to let
property for it to become a millstone around your neck. It’s all about
mitigating your risks i.e. your costs and maximising your income to make your
buy to let property the investment you want it to be.
However on the other side of the coin, two in three
landlords who have bought property since 2007 have done so without a mortgage.
A rise in interest rates might be a good thing, I’ll give you some background
first, and then I’ll explain why. Solihull landlords have seen the return on
investment for their Solihull buy to let property over the last couple of
years, perform very well indeed with Solihull property values rising by 21.11%
since the Spring of 2009. However when rates do rise, more expensive mortgage rates will ease the
demand for borrowing but on the other hand it may temper house price growth;
making the property market more competitive... therefore we should see the
return of some bargain property buys in Solihull!
Finally although I can ask all Solihull homeowners and Solihull
landlords, who have a mortgage that isn’t fixed to recognise that rates will rise
throughout 2016 to 2018 and will continue to move steadily upwards towards more
viable and feasible long term levels. I
am not qualified to give mortgage advice and this is my personal opinion, so please
speak to a qualified mortgage broker and if appropriate, fix your mortgage
before interest rates rise. Don’t say I didn’t warn you!
In the meantime, if you are a landlord looking for a bargain
now, don’t despair ... there are plenty out there, if you know where to look!
One place is Rightmove, another Zoopla plus other smaller, less popular portals.
However sometimes you can’t see the wood for the trees. At the time of writing Rightmove
had 877 properties for sale in Solihull, Zoopla 178 properties for sale in the town
... where do you start? A lot of savvy Solihull landlords like to pop into our Solihull property lounge and discuss the property market and how I can help them.
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