A few 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 9,452
homeowners in Maidenhead, 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 3,373 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. We
thought this would be before Christmas but all the signs at that this will not
be until mid 2016. 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 Maidenhead
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 Maidenhead 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
the Spring will be here and you've not even thought about it! 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 Maidenhead
and seriously consider fixing your mortgage rate now. You didn’t buy your Maidenhead 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 Maidenhead 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. Maidenhead landlords have see their return on
investment for their Maidenhead buy to let property, over the last couple of
years, perform very well indeed with Maidenhead property values rising by 42.19%
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 Maidenhead!
Finally though, can I ask all Maidenhead homeowners and Maidenhead
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 358 properties for sale in Maidenhead, Zoopla 247 properties for
sale in the town and OnTheMarket 32 properties ... where do you start? A lot of
savvy Maidenhead landlords like to visit the Maidenhead 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 Maidenhead.
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