Buy to Let - Impact of Rising Interest Rates

Buy to Let - Impact of Rising Interest Rates

Thursday 2nd February 2023

Buy to Let - Impact of Rising Interest Rates

The Monetary Policy Committee (MPC) of the Bank of England raised the base rate by 50 basis points to 4% today, the tenth successive increase. That was bad news for buy to let property investors, but not so for savers.

The good news is that the Bank signalled that it may be near the peak of interest rate rises. For some over-leveraged buy to let investors, this may be too late, for others, it will present an opportunity. As ever, opportunities need seizing as the window is only open for a short period. The last great opportunity was in the aftermath of the Credit Crunch and financial crisis of 2008.

Economic Outlook

The Bank stated that the UK was likely to be in a technical recession in 2023, but not as long or as deep as previously forecast. It also said that inflation would continue to fall, which is good news for landlords, heading back to below the target of 2%.

Buy to Let Strategy

Property investors must reduce their costs and increase their income through rent reviews. Costs can be reduced by switching to more competitive letting agents and ensuring that property management is efficient, effective, and of good value. You must compare agent fees. As a matter of good management, rent reviews should be undertaken on the renewal of a tenancy.

Liverpool Property Investment

There has not been a better time in more than decade to invest in buy to let property, as over-leveraged landlords sell, whether corporate or private. Property auctions are a great place to find bargain properties and repossessed houses for sale and a good property sourcing agent can help you find exceptional value.

Contact Us Now

If you wish to discuss any of these points raised in this short piece, please call the office, or drop us an e-mail. Contact us, we would be most happy to help you.