A couple of weeks ago, I mentioned in this blog about 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 8,133
homeowners in Royal Tunbridge Wells, who own your own home
with a mortgage, then you need to consider your options and start to budget for
an interest rate rise. However, if you are a landlord, who owns one of the 5,075
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 when, they will rise. Some
people think it will be before Christmas, although I am of the opinion, it will
early in the New Year around Easter time, when they do rise. I also expect those
rises will be slow, steady and limited. It depends on what is happens to UK wage
rises, UK inflation and the general state of the British economy. Nevertheless,
as much most of us in Royal Tunbridge Wells would love to pull the shutters and
stick two fingers up to the world, we have to recognise we are part of a global
economy and global economic worries still exist to prevent an abrupt and
instantaneous rate rise.
Those Royal Tunbridge Wells landlords, who do have a
mortgage, need to realise that as interest rates rise, their monthly mortgage
costs rise. It’s easy to say you will look at your mortgage next month, then
before you know it, Christmas will be here!
Don’t forget, mortgage lenders have always removed the juicy low rate
mortgage deals a few months before interest rate rise. Speak to a qualified
mortgage arranger, there are lots of them in Royal Tunbridge Wells and
seriously consider fixing your mortgage rate now. You didn’t buy your Royal Tunbridge Wells buy
to let property for it to become a millstone around your neck. It’s all about
mitigating your costs and maximising your income to make your Royal Tunbridge
Wells 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. Let me give you some background
first, then I’ll explain why. Royal Tunbridge Wells landlords have see their return
on investment for their Royal Tunbridge Wells buy to let property, over the
last couple of years, perform very well indeed with Royal Tunbridge Wells property
values rising by 28.43% since the Spring of 2009. However, when rates do rise, whilst
more expensive mortgage rates will ease the demand for borrowing, on the other
hand, it may temper house price growth, making the property market more
competitive... and therefore, we should see the return of some bargain property
buys in Royal Tunbridge Wells!
Finally though, can I ask all Royal Tunbridge Wells
homeowners and Royal Tunbridge Wells landlords, who have a mortgage that isn’t
fixed, they need 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
that advice and this is my personal opinion, so please speak to a qualified
mortgage arranger 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 and another OnTheMarket. However,
sometimes, you can’t see the wood for the trees. At the time of writing, Rightmove
had 422 properties for sale in Royal Tunbridge Wells, Zoopla 232 properties for
sale in the town and OnTheMarket 178 properties ... where do you start?
A lot
of savvy Royal Tunbridge Wells landlords like to visit the Royal Tunbridge
Wells Property Blog where, irrespective of which agent is selling it, I regularly post
what I consider out of the hundreds of properties on the market, to be the best
buy to let deal in Royal Tunbridge Wells.
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