The Bank of England have announced the decision of the Monetary Policy Committee to keep the base rate at 0.5%, the same level since March 2009. Inflationary pressures led some commentators to speculate a rate rise may happen sooner rather than later, but an unexpected contraction in the economy for Q4 2010 appears to have postponed that for now.
Yet, despite the base rate hold, it appears fixed-rates on residential mortgages are rising suggesting the pricing-in of a future base rate rise.
Despite the uncertainty surrounding interest rate, buy-to-let investing appears to be enjoying a resurgence. From 2008 to 2009, the number of new buy-to-let mortgages offered dropped by 60%. From 2009 to 2010, the number increased by 10%.
Notwithstanding the need for larger deposits (around 30% at a minimum), investors are returning to the market and picking up residential properties at realistic prices. Local letting agents in the Woodford area report demand for rental properties is strong and growing, with the difficulties in the mortgage market leading to greater demand for rentals.
The ability to proceed quickly once the transaction is agreed is paramount. Neither a seller or buyer will want to wait around as rates potentially climb, causing transactions to fall through. Contact us to find out how our experience in this market will ensure your B-T-L investment is making money for you sooner rather than later.