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* Home * About * Contact Us * Forums * News * Info * Agricultural * Building * Business * Buy to Let * Case Law * Commercial * Conveyancing * Coronavirus * Debt Collection * Deposits * Development * Energy Efficiency * Evictions * FAQ * Finance * Fraud * HMO Multi-Occupied * Holiday Lets * Housing Benefit * Insurance * Inventory * Investment * Legal * Letting * Letting Agents * licensing * licensing * Lodgers * Long Leasehold * Maintenance * Landlord insurance * Docs * Advertise * Media Pack * Terms & Conditions * More * Case Law * Glossary * Useful Links * LZ Voice * Subscribe here * Coming soon Search 22.9 C London Friday, June 23, 2023 LandlordZONE * Home * About * Contact Us * Forums * News * Evictions RENTAL MARKET REACHING CRISIS POINT AS ‘PERFECT STORM’ HITS LANDLORDS AND… News LANDLORD PAYS £40,000 FINE AFTER LARGE HMO ‘PUT TENANTS AT RISK’ News LANDLORD SECURES HUGE VICTORY IN £18,000 RENT REPAYMENT ORDER CASE News LLOYDS BANK’S PLANS TO BUILD ‘THOUSANDS’ OF RENTAL HOMES PROVE OVER… News BREAKING: LANDLORDS FACE HIGHER MORTGAGE COSTS AS BASE RATE RISES BY… * Info * AllAgriculturalBuildingBusinessBuy to LetCase LawCommercialConveyancingCoronavirusDebt CollectionDepositsDevelopmentEnergy EfficiencyEvictionsFAQFinanceFraudHMO Multi-OccupiedHoliday LetsHousing BenefitInsuranceInventoryInvestmentLegalLettingLetting AgentslicensinglicensingLodgersLong LeaseholdMaintenance Evictions RENTAL MARKET REACHING CRISIS POINT AS ‘PERFECT STORM’ HITS LANDLORDS AND… HMO Multi-Occupied BE WARNED: WHY KEEPING RECORDS IS SO IMPORTANT FOR LANDLORDS Buy to Let NEW REPORT HAILS GROWTH OF INSTITUTIONAL BUILD-TO-RENT Mortgages TREASURY CHIEF SAYS LANDLORDS AND HOMEOWNERS ‘WILL NOT GET MORTGAGE HELP’ * Landlord insurance * Docs * Advertise * Media Pack * Terms & Conditions * More * Case Law * Glossary * Useful Links * LZ Voice * HMO Multi-Occupied BE WARNED: WHY KEEPING RECORDS IS SO IMPORTANT FOR LANDLORDS LZ Voice REFORM: ‘WE NEED LEGISLATION THAT WORKS WITH LANDLORDS, NOT AGAINST THEM’ LZ Voice BLOG: WHY ABOLISHING SECTION 21 ISN’T ALL BAD NEWS FOR LANDLORDS LZ Voice BLOG: MINISTERS MUST RECONSIDER PERIODIC TENANCY PLANS FOR STUDENTS LZ Voice BLOG: WILL THE LOOMING ‘PETS IN LETS’ RULES PROVE PERVASIVE? * Subscribe here * Coming soon Subscribe here for the latest landlord news and receive tips from industry experts: Home News BREAKING: Landlords face higher mortgage costs as base rate rises by 0.5% * News BREAKING: LANDLORDS FACE HIGHER MORTGAGE COSTS AS BASE RATE RISES BY 0.5% By Nigel Lewis - 22nd June 2023 2214 2 Facebook Twitter Google+ Pinterest WhatsApp The Bank of England has this lunchtime raised its base rate by 0.5% as the venerable institution fights to bring down inflation, which yesterday was revealed to be sticking stubbornly at 8.7%, way above the bank’s target of 2%. Commentators and mortgage holders alike had hoped that any rise would be limited to a quarter percent rise, but a majority of the BoE’s Monetary Policy Committee (MPC) believe stronger measures are required to bring down ‘core inflation’. “The MPC’s remit is clear that the inflation target applies at all times, reflecting the primacy of price stability in the UK monetary policy framework,” it says in justification. The move is likely – but not guaranteed – to push up interest rates for new landlord mortgages for buy to let properties, and make it more painful for those who are about to come off low fixed rates agreed two or five years ago when interest rates were much lower. Seven members of the MPC including Governor Andrew Bailey voted to increase the base rate while two said they’d prefer to keep it at 4.5%. REACTION Matt Thompson (pictured), head of sales at Chestertons, says: “We expect the rate rise to have an impact on overleveraged buy-to-let investors whose increased mortgage payments could lead to their investment making limited profit or even a loss. “This could result in some landlords deciding to offload their assets. At this stage, we haven’t yet encountered homeowners who have been forced to sell up but, if rates continue to rise, some owners may be forced to review the situation and weigh up their options. “At the same time, demand for properties in London continues to stay strong as the capital remains a hotspot for a variety of buyer demographics including international buyers.” Alex Lyle (pictured) director of Richmond estate agency Antony Roberts, says: ‘Yet another interest rate rise, coming on the back of so many and with the potential for more to come, creates further uncertainty, which is not good for the housing market. “Although some parts of the country have proven remarkably resilient to increasing interest rates, inevitably this is less the case the higher they go. “This latest rate rise will give those buyers who were anxious anyway an excuse to back out. Quite a few buyers and sellers are sitting tight until the autumn in the hope that the situation will have settled down by then.” Read the MPC decision in full. Subscribe here for the latest landlord news and receive tips from industry experts: * TAGS * Bank Base Rate Facebook Twitter Google+ Pinterest WhatsApp Previous articleFamous landlord to pay £166,000 legal costs after losing court claim Next articleLloyds Bank’s plans to build ‘thousands’ of rental homes prove over optimistic Nigel Lewis https://www.landlordzone.co.uk/author-bios-nigel-lewis Nigel Lewis is a property writer and editor with a 27-year track record working for national newspapers, magazines, websites and also leading content media agencies and portals. editor@landlordzone.co.uk RELATED ARTICLESMORE FROM AUTHOR News EXPERT REACTION: WHAT WILL THE BASE RATE RISE MEAN FOR THE PROPERTY MARKET? News BANK RATE RISE – BANK RAISES RATE TO 0.75% 2 COMMENTS 1. Steve Welburn 22nd June 2023 at 7:22 pm It beggars belief that the BOE keeps increasing the base rate in order to stop us overspending. How draconian!! Would it not have been prudent to warn the country first, sending many messages over a 3 month period before resorting to such drastic rate increases. I am lucky to be able to pass on the rate increases in most cases. I feel so sorry for my tenants, but as a Sole Trader I have absolutely no choice. Section 24 “Tenant Tax” should be reversed immediately or the funds collected via the landlord be paid back to the private tenants. Another Stealth tax burden created by Osborne. Sole Trader landlords paying more for their mortgages, will also have to consider where the funds will come from to pay HMRC come January 2024 as the interest element cannot be fully offset. It’s a mess that will not go away unless Section 24 is abolished during this turbulent time. Reply 2. Paul Barrett 22nd June 2023 at 11:13 pm This isn’t the end. It isn’t even the beginning of the end. But it is perhaps the end of the beginning. BoE IR will be increasing to 10%. The BoE fails to realise that increasing IR won’t squeeze out spending. In case the BoE wasn’t aware there is a COLC. There simply isn’t excessive consumer spending. People are struggling as it is. To then add additional costs for mortgages just makes the COLC worse. The BoE IR increases are incompetent. Rather the BoE should have reduced IR ideally to zero. This could result in mortgages being about 2%. Even that would still mean people are struggling. If the BoE is to prevent mass repossessions then they need to instruct lenders to offer IO mortgages with NO repayment vehicle required and to extend mortgage terms to age 90. The PRA needs to be abolished along with S24 and the SDLT surcharge. The MMR also should be abolished. Reply LEAVE A REPLY CANCEL REPLY Please enter your comment! Please enter your name here You have entered an incorrect email address! 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