Fri 14 Oct 2022
In late September, there was a further increase in interest rates from the Bank of England, and UK interest rates have increased to 2.25%. This is the seventh increase in a row as the Bank of England attempts to curb increasing prices. Borrowing costs in the UK are at their highest levels since 2008, rising by half a percentage point from 1.75%.
One of the interesting things about the decision to increase interest rates by 0.5% is that there was a genuine split in the Bank of England's monetary policy committee (MPC). Five members voted for the 0.5% increase, but three members are said to have voted for a 0.75% increase while there was a solitary vote for an 0.25% rise.
Inflation in the UK has reached its worst level in four decades.
The letting market will be impacted, like all sectors
This change impacts all people, and all walks of life, but at ADM Residential, we focus on the property and rental market. Therefore, we take particular interest in what these changes mean to buyers, sellers, landlords, and of course, tenants.
Given there have been many increases of late, it is not as though this change is unexpected. Many landlords have reviewed their buy-to-let mortgage, and their finances in general, by this point. The key issue comes if people feel there is a breaking point in what they can pay.
While interest rate increases are damaging, experienced landlords know UK levels are still historically low. For those looking at property investment as a long-term activity, current levels aren’t the barrier to buying that they are for some buyers.
Also, with buyers facing harder challenges in stepping onto the property ladder, demand for rental property remains high. There are challenges for landlords with rising interest rates, but as of yet, it isn’t a game changer in the industry, but it is important to stay up to date with developments.
In early August, NRLA policy and campaigns director Chris Norris spoke about this matter, and while Liz Truss is now installed as Prime Minister, the overall view remains the same; “We need to convince the incoming Prime Minister and his or her cabinet that the hostile treatment of private landlords and unjust way in which we are taxed at present will not only hurt our industry but add to the cost-of-living crisis as the price of accommodation rises to cover landlords costs. In 2016, we commissioned an economic model of the potential impact of significant interest rate increases post Mr Osborne’s reforms and predicted the loss of almost 100,000 additional homes to the PRS, additional rent increases of almost 2 per cent, and £600m of losses by landlords. All of which would be catastrophic should it come to pass.”
Contact ADM Residential to sell your Huddersfield home
Anyone who is keen to sell their home in Huddersfield should contact ADM Residential today. We are more than happy to provide you with a property valuation, which is the ideal starting point for anyone looking to enter the Huddersfield housing market with confidence.
This is a busy time of year in the local and national housing market, but we look forward to assisting you. Call on your leading Huddersfield estate agents today for help and guidance in the local market.
"With adm you have the choice of what to rent or what to buy! I rent a two bedroom town house and before I moved in! It had Been lived in for 8 years! Yes bit worse for ware but landlord had no hesitation in decorating! Great service from ADM RESIDENTIAL! Very helpful and will bend over backwards to find you a place at the budget you can afford!"