Base Interest Rates can rise again, warn mortgage experts

Posted under News by Michael

In spite of the fact that the Bank of England reduced base interest rate to a level seen only in 17th century, mortgage experts warned landlords that rates can begin to rise once again in a matter of time.

It will add new financial burden for the buy-to-let investors. Residential landlords are advised to get prepared for rate hikes that may be introduced in 2nd half of the year.

Hopkinson, at Property Portfolio Rescue, described the situation as “a ticking time bomb which could prove disastrous”. The landlords with flexible rate mortgage contracts or tracker would be the worst sufferer of rising rates. Some of them escaped from high rate over past many months, but could be deprived of this advantage any time. Those intending to re-mortgage later this year will also be required to pay higher rates.

Considering that Hopkinson’s projections will prove to be correct, 20% of landlords will go into repossession by the end of year. Hopkinson warns landlords not to feel secure in the hope of market bounce back, even after increase in interest rates. He advises them to augment their liquid cash reserves during low interest period for the anticipated hike.