With speculation the bank of England has announced it is keeping the rates as it is although a rise could happen before Christmas.
Interest rates are at a very historic low since the start of the pandemic but the bank has indicated that modest rises are expected in the coming months. The next decision is due to take place on the 16th December.
The bank of England base rate is the bench mark for the cost of borrowing. It is important to homeowners and buy to let landlords because mortgage lenders base their rates on what they can charge on it.
A lot of news regarding energy bills increasing which also means that the weekly shop is increasing. The rate of inflation affects everything we need to pay for. Grocery prices are estimated to have already increased over the past month or so. Manufacturers are passing on the cost of rising labour, materials, energy and transport.
The bank of England have a target of halving the inflation to 2%. One way they can achieve this is by increasing rates.
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Any increase in rates could have an affect on any bodies monthly mortgage payments unless you have a fixed rate. Most people tie their fix rates for 2 years or more. If you are a fixed rate it shouldn’t be a problem.
However, 20% of borrows have a variable rate or a tracker mortgage and your fixed deal may be coming to an end.
The interest rate paid on tracker mortgage is usually the bank of England base rate plus a set percentage. For example, the current base rate is 0.1% plus 1% would mean you pay 1.1% right now.
We understand that most high street lenders have already begun increasing their interest rates in anticipation of a rate rise before or after Christmas.
It is important that you keep an eye on the market.
If you are on a tracker or a variable mortgage you can shop around to see if you can find a cheaper fixed mortgage option or you may have to pay an early redemption. You should speak to your advisors.
The price of a typical home in the United Kingdom has exceeded £250,000 for the first time according to the nationwide. The average price property in October was £250,311 making a 9.9 annual increase. This was a 0.7 month on month uplift. However, there was a word of caution when the Nationwide stated the pushing up mortgage rate could dent the property market.
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It was reported recently that over 100,000 private rental homes across the UK are being let illegally because they already fail to meet the EPC requirements.
A recent technically firm claims that over 106,337 private rented properties are currently under the minimum standard.
The Government recently gave funding to 59 councils to improve standards. However, 281 other councils collectively account for 78% of the non-compliant properties.
We understand it is a new Government initiative to find people who do not adhere to the minimum requirements.
It was reported recently that there is a strong growth since the pandemic. Rents across London fell by 3.4% between 2019-2020. However, since the beginning of 2021 they have increased by 9.4% meaning they are now 5.7% higher than the beginning of the pandemic.
The lettings industry overall has seen a sharp decline in available properties. The growth is expected to continue, as the volume of properties coming on the market is substantially less. Some landlords are now securing rental let prices of 10-20% higher than they to the pre-covid out break.
A further revival is now coming in from the form of foreign tenants starting to return to the market.
Landlords now have twice as long to pay capital gains tax, with the window being doubled from 36 days in this weeks Autumn budget. This applies to UK and non UK residents who sell their property, and the changes come in immediately.
The Government state that “this will ensure that tax payers have sufficient time to report and pay CGT, as recommended by the office of tax implication”.
There are a lot of letting agents getting calls from companies who want to rent…