12 October 2017
Rates rising....and great event for Landlords
You can’t have missed the increasing press column inches regarding a possible Bank Base Rate rise recently. Sometimes I do think we talk the market in to a direction rather than letting it take its natural path! History suggests that we tend to see the fixed rates rise first, before the bank base itself. Over the last week we’ve seen a number of lenders increase their fixed rates, including Nationwide, Halifax and Barclays. Some rates have increased by up to 0.9%! I suspect others will also follow as SWAP rates (the mechanism through which lenders can acquire a fixed price for funding over a specific period of time) have also increased over the last week.
That said, the Bank of England has to take in to account the huge debt levels the nation currently has and that even a small base rate hike could have a significant effect on current spending levels. However, it appears to be an issue which is gathering pace and we should watch this development closely.
Do remember that even if your rate is not up for renewal for a few months, some lenders mortgage offers are valid up to six months, so you can arrange a new rate in advance of your current rate coming to an end. This will also ensure that you don’t move to the lenders standard variable rate, which will inevitably will be higher than your current rate, whilst looking for your next mortgage product.
And finally, it was great to see so many people at the Landlord Property Investor and Homebuyer Show at the London ExCel last week. It also highlighted how many people are not yet aware of the new rules surrounding portfolio landlords. This is a large education piece and one that needs to be taken in to account asap by anyone who owns more than four properties. Although each lender’s requirements are different, in the main, the common requirements are now a Business Plan, a Cashflow and forecast, Assets and Liabilities statements and full details on the whole portfolio including current mortgage, value, rent achieved, etc. These new rules will take a while to bed in and as there is an increase in underwriting, I suspect delays will occur for a while, so be aware if you are in a rush!