Warning to the Buy To Let sector

The managing director of an online mortgage broker warns that the base rate hike announced yesterday by the Bank of England will not be the last.


Angus Stewart of Property Master said the decision by the Bank’s Monetary Policy Committee to raise the base rate by an additional quarter percent, from 0.5 percent to 0.75 percent: “This is the third base rate hike in just over three months and unfortunately we are not expecting it. be the last.


“Lenders have been slower than expected to reflect the changing interest rate environment that began last December, but that has now reversed. There have been wholesale commodity price revisions and the result has generally been to raise the mortgage rate homeowners will have to pay.



He says interest rates are just a pain for homeowners right now.


Stewart continues, “Homeowners who wish to meet new energy efficiency requirements as well as routine required maintenance are impacted by higher building material costs.


“And owners of more than one property have been left out of support to meet the cost of dealing with the surfacing crisis and some of those operating multi-occupancy homes are seeing local councils adopt a new policy of generating an invoice for housing tax for each room. The only obvious result will be higher rents and increased pressure on tenants.



Meanwhile, Matt Staton, lettings manager at Berkshire Hathaway HomeServices London Kay & Co, adds: “You would expect that with rising interest rates and all the disruption of recent years, market growth housing is stagnating – but it continues to thrive against all odds.


“While we expect to see new trends emerge as economic conditions settle in households across the country. As budgets tighten and interest rates rise, this may cause a tilt towards rentals, as some would-be owners put their buying plans on ice and opt for longer rentals.


“With rising energy bills in mind, renters are also likely to be more considered in their choice of property, which could lead to increased demand for more energy-efficient homes and lower bills. “As we weather new economic headwinds, the real estate sector will need to prepare for a turbulent period. But even so, we expect the market to remain resilient and buoyant in the months ahead.”



Stephen V. Lee