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  • Buy-to-Let

    What will you do when interest rates go up?

    Based on the comments on Section 24 it appears that there are a significant number of landlords who will not be able to manage financially when this is fully implemented.  I expect interest rates to start increasing within the next two years so would ask what impact this will have - assume a 1 % or 2% increase in interest rates - or £1,000 - £2,000 per annum on a £100,000 mortgage.

    It is also possible that new underwriting terms will keep landlords on a lender's SVR or push them towards commercial lenders so again this may increase the interest payable on their mortgages.

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    No indication of it as of yet - though start looking at Long-Term Fix's to lock in todays lower rates.

    In addition to look more favourably at reducing mortgage amount outstanding, perhaps selling the odd property to pay down others to get lower LTV's / Lower Rates.
    Simply working the portfolio to ensure the investment still works.

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    _________________________________________________________________________

    Looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance.
    The above post is not financial advice, its often me rambling - passing time on a coffee break.


    Thank you for starting such an important topic!

    I believe that landlords should be repairing the roof while the sun is shining - in other words, preparing for this because it's not "if", it's "when".

    See - 7 things to do while interest rates are low

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    I agree with Adam and to talk about rates increasing is perhaps a little bit premature.

    I have recently had discussions with senior industry figures about this very point and the overwhelming thing that I took from those discussions? There is no consensus. While one predicts rates increasing others have rates remaining static. One didn’t even have an opinion based on the uncertainty of Brexit and its effects.

    I’ve mentioned it many times before, fixed rates are potentially at the lowest they are ever going to be and now IS the time to be considering these as an option. Build in some protection, certainty and margin while you can. Take control.

    I am reviewing portfolios large and small on a daily basis and establishing where savings and certainties can be made. It isn’t too late to get on top of this but undoubtedly time could be running out.

    The issues and challenges that we face won’t go away with a new government and won’t go away if we choose to ignore them. Hoping you won’t be affected isn’t an effective strategy but it’s one that’s still being overused.

    Let me take a look at what you have, what you need and where you want to be and lets establish the best way forward for YOU.

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    Mr Mark Alefounder

    Mortgage & Protection Broker

    Optimum Independent Financial Advisers

    Mobile 07716 647 928

    Tel: 01206 366700

    http://www.optimum-ifa.co.uk

    The financial regulator, the ‘Financial Conduct Authority’ designates that there are two different types of financial advisers, ‘independent’ and ‘restricted’. The status of an adviser firm will affect the type of advice that is given. A restricted adviser firm can only recommend certain products or product providers, whereas an independent adviser firm, such as Optimum, is able to consider and recommend all types of retail investment products and/or providers that could best meet clients needs and objectives. Optimum Independent Financial Advisers offers genuine unbiased and unrestricted advice.

    Your home may be repossessed if you do not keep up repayments on your mortgage.

    Optimum Independent Financial Advisers is authorised and regulated by the Financial Conduct Authority

    Financial Services Register Firm Reference Number (FRN): 223293

    © Copyright 2017 Optimum Independent Financial Advisers. All Rights Reserved


    My comment was that I expect interest rates to increase within the next two years - in my opinion two years is a short period for BTL budgeting purposes so I don't think it is premature to talk about it now.

    I am also of the opinion that landlords with more than four properties are likely to be pushed towards commercial lenders with higher rates and therefore again this should be planned for.

    We were given two years notice of Section 24 coming into force on a staggered basis and that is still causing landlords issues, any increase in interest rates could push up costs more than Section 24 and with little or no notice.



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    There are still LL that have no idea about Section 24 and even those that have heard of it and believe for reasons only known to them it seems, that they will be unaffected.

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    Mr Mark Alefounder

    Mortgage & Protection Broker

    Optimum Independent Financial Advisers

    Mobile 07716 647 928

    Tel: 01206 366700

    http://www.optimum-ifa.co.uk

    The financial regulator, the ‘Financial Conduct Authority’ designates that there are two different types of financial advisers, ‘independent’ and ‘restricted’. The status of an adviser firm will affect the type of advice that is given. A restricted adviser firm can only recommend certain products or product providers, whereas an independent adviser firm, such as Optimum, is able to consider and recommend all types of retail investment products and/or providers that could best meet clients needs and objectives. Optimum Independent Financial Advisers offers genuine unbiased and unrestricted advice.

    Your home may be repossessed if you do not keep up repayments on your mortgage.

    Optimum Independent Financial Advisers is authorised and regulated by the Financial Conduct Authority

    Financial Services Register Firm Reference Number (FRN): 223293

    © Copyright 2017 Optimum Independent Financial Advisers. All Rights Reserved

    Mark spot on

    I did my first Company tax return and Profit and loss accounts

    and I asked my advisor who works for a very large practice and he said only less than a Handful have taken any action to navigate around S24

    a lot of apathy out there

    But be it upon there own heads


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    Learn Change and Adapt ?????


    I am one of those landlords that are affected by Section 24 and on reviewing the extent of the impact I am satisfied that the best option for me is to continue as at present, I expect there are many more landlords in a similar position or perhaps with no mortgages and therefore have no urgency in relation to Section 24.  That said I am still of the opinion that people should be stress testing their business model for an increase in interest rates sooner rather than later even if the experts are divided as to when rates will rise hence the thread question.


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    Agreed

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    Mr Mark Alefounder

    Mortgage & Protection Broker

    Optimum Independent Financial Advisers

    Mobile 07716 647 928

    Tel: 01206 366700

    http://www.optimum-ifa.co.uk

    The financial regulator, the ‘Financial Conduct Authority’ designates that there are two different types of financial advisers, ‘independent’ and ‘restricted’. The status of an adviser firm will affect the type of advice that is given. A restricted adviser firm can only recommend certain products or product providers, whereas an independent adviser firm, such as Optimum, is able to consider and recommend all types of retail investment products and/or providers that could best meet clients needs and objectives. Optimum Independent Financial Advisers offers genuine unbiased and unrestricted advice.

    Your home may be repossessed if you do not keep up repayments on your mortgage.

    Optimum Independent Financial Advisers is authorised and regulated by the Financial Conduct Authority

    Financial Services Register Firm Reference Number (FRN): 223293

    © Copyright 2017 Optimum Independent Financial Advisers. All Rights Reserved

    I Must say unless a Landlord is on a good low cost tracker such as ME

    they should move to fixed Now ?? it will never be cheaper than it is now


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    Learn Change and Adapt ?????

    Whilst there is an increasing number of people looking at their options too many people are sitting on their hands.

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    Mr Mark Alefounder

    Mortgage & Protection Broker

    Optimum Independent Financial Advisers

    Mobile 07716 647 928

    Tel: 01206 366700

    http://www.optimum-ifa.co.uk

    The financial regulator, the ‘Financial Conduct Authority’ designates that there are two different types of financial advisers, ‘independent’ and ‘restricted’. The status of an adviser firm will affect the type of advice that is given. A restricted adviser firm can only recommend certain products or product providers, whereas an independent adviser firm, such as Optimum, is able to consider and recommend all types of retail investment products and/or providers that could best meet clients needs and objectives. Optimum Independent Financial Advisers offers genuine unbiased and unrestricted advice.

    Your home may be repossessed if you do not keep up repayments on your mortgage.

    Optimum Independent Financial Advisers is authorised and regulated by the Financial Conduct Authority

    Financial Services Register Firm Reference Number (FRN): 223293

    © Copyright 2017 Optimum Independent Financial Advisers. All Rights Reserved