Several investors and landlords, though buoyed by the delay of certain interest rates, are still cautious on further announcements regarding the said matter.
The unfailing 64,000 dollar question in money market nowadays is when will the Bank of England finally boost up its base rate, which has constantly remained at 0.5% for almost seven years.
Forecasters are still quite unsure on this, but the Governor of the Bank of England have recently admitted that rates will likely remain at around 0.5% for longer than formerly anticipated. Nonetheless, most residential landlords seem to have already made some preparations for a possible rise.
The latest survey made by YouGov determined that 75% of buy to let investors did not expect that they would have any problem in paying their mortgage even if there was as much as a 1.5% rise in the Bank rate.
The survey showed that around 60 percent of the participant said that rental incomes would still be higher than mortgage fees, even after such an increase. On the other hand, the remaining 40 percent said that they had already set aside some contingency funds which would be enough to cover this level of borrowing costs.
Moreover, as claimed by The Council of Mortgage lenders, numerous mortgage lenders have already supplemented their average interest rates at which the stress test the BTL mortgages. However, this increase are still relatively lower than those used for domestic borrowers.
This only shows that the great majority of BTL investors and landlords are efficiently responsible, as well as financially resilient investors. It lays to rest that old misconceptions perpetuated in some areas that most landlords are exploitative, unfair, and financially over-stretched.
In reality, the vast majority of these investors and landlords offer appropriate accommodation to people who don’t want to buy their own property yet, or to those who still can’t afford to obtain one.
Most landlords and BTL investors work very hard to maintain the conditions of the properties they own, thus, upgrading the total value of their respective properties.