Interest rate increase 'good news for landlords'
Published: 05-Jul-2007
Today's rise in interest rates will make it easier for landlords to let their properties, a new report suggests.
Earlier today (July 5th), the Bank of England opted to increase interest rates by 0.25 per cent to 5.75 per cent. This means that the bass rate has increased five times in the past 11 months.
In light of this, Nationwide's specialist lender, UCB Home Loans, has revealed that rising rates are helping landlords fill their property.
"The combination of high house prices and more expensive loans is pushing more people into the rental market, where, as tenants, their overall outgoings are generally lower than those of homeowners," explained Keith Astill, managing director at the lender.
"Ironically, people are renting for longer because it’s more difficult to afford to buy, which is in turn providing a boost to the buy-to-let sector.
However, Mr Astill warned landlords to remain cautious, as it is inevitable that the buy-to-let market willsuffer an adjustment sometime in the future.
"For some while now, landlords have benefited from a gradual increase in the population of people wanting to rent property," he said.
"Whilst the market is likely to remain reasonably strong for the foreseeable future, there will come a point where natural forces come into play and the market balances itself out."
