[Finance] Interest Rates - Review

[The Grockle]

I think most landlords will appreciate it's better to keep tenants and keep them happy as opposed to pass on interst rate increases. Void periods are costly. That said, when tenants leave of their own accord I imagine most landlords will re-let at the going market rate.....this is probably the moment to increase rents to cover extra interest. Like Dorset, Brighton and Hove is crazy as well.

I hadn't thought of that. I guess it preferable to have a good tenant who pays on time and stays longer term and take a lower profit.

It's just crazy round here there 150k people in Poole yet there's currently only nine 3 bed houses available to rent on rightmove. No wonder prices are so high.

 

[Herr Tubthumper]

…..

 

[Herr Tubthumper]

I hadn't thought of that. I guess it preferable to have a good tenant who pays on time and stays longer term and take a lower profit.

It's just crazy round here there 150k people in Poole yet there's currently only nine 3 bed houses available to rent on rightmove. No wonder prices are so high.

It might be a lower profit in one sense but, and using your example of a 2k rent, if you push up the rent and the tenant leaves you have a void period. If the house is empty for a month you lose 2k rent, plus you have to pay a month council tax plus various start up costs with the new tenants. This could easily come to 3k. So if you decided you wanted to increase the rent by 250 a month and the tenants left….you’ve now just cost yourself this same amount (over the next year).

 

[Guinness Boy]

I’m sure @Machiavelli has a good response BUT with every increase more and more people with mortgages will be turning down the heating and buying less food surely? It’s incremental but there will surely come a point where it’s more noticeabl?

Sorry, that’s not the case.

This is supply side inflation and the normal monetary levers don’t apply.

I haven’t saved a penny with these new rates. Firstly the banks haven’t applied the higher rates to savings and secondly I need to eat, travel to work and service the house. These rates have caused delays to my expense payments from my old job so, in fact, I’ve been dipping into my savings to live.

God help any youngster who just bought a house. The BOE need to bring rates down before there’s a proper recession and millions of repossessions

 

[nicko31]

Interest rate rises strengthen the currency of the country raising them, do they not? A stronger currency reduces the prices of imports (eg food), so presumably it would help reduce inflation. Happy to have it explained to me why this is wrong.

Yep, its helping prices at the pump, saw £1.44 for diesel today.

 

[sydney]

It might be a lower profit in one sense but, and using your example of a 2k rent, if you push up the rent and the tenant leaves you have a void period. If the house is empty for a month you lose 2k rent, plus you have to pay a month council tax plus various start up costs with the new tenants. This could easily come to 3k. So if you decided you wanted to increase the rent by 250 a month and the tenants left….you’ve now just cost yourself this same amount (over the next year).

and rightfully so ....we all lose , the banks always win.

And if the banks happen to lose , the govt. bails them out , with our money.

Pissed off yet...??

 

[Mellotron]

Just a quick one - my 2 year fixed finishes in November, my mortgage guy is trying to get me to get on with sorting a new deal, am I not right in thinking I might be better to wait a couple of months or so?

 

[Uncle Spielberg]

Just a quick one - my 2 year fixed finishes in November, my mortgage guy is trying to get me to get on with sorting a new deal, am I not right in thinking I might be better to wait a couple of months or so?

I think he is right, what I would do is secure a rate and then review it before it starts and compare with your present lender and market but you need 2-3 months to get a re mortgage through

 

[Mellotron]

I think he is right, what I would do is secure a rate and then review it before it starts and compare with your present lender and market but you need 2-3 months to get a re mortgage through

Thanks @Uncle Spielberg - appreciate it.

 

[Herr Tubthumper]

and rightfully so ....we all lose , the banks always win.

And if the banks happen to lose , the govt. bails them out , with our money.

Pissed off yet...??

My post was about void periods for BTL mortgages.....not sure what your point is?

 

[Wrong-Direction]

Still no point getting on the ladder yet

 

[southstandandy]

At least our savings are now getting some form of decent return.

 

[Mustafa II]

My current mortgage is up in March '24. Nervous about it (currently 1.8%)

I'm hoping that the base rates will, or will at least be anticipated to, fall by then and this will be reflected in mortgages.

Whatever happens I'll be going 2 year fixed over 30 years and just overpay when I can afford it.

 

[Paulie Gualtieri]

My current mortgage is up in March '24. Nervous about it (currently 1.8%)

I'm hoping that the base rates will, or will at least be anticipated to, fall by then and this will be reflected in mortgages.

Whatever happens I'll be going 2 year fixed over 30 years and just overpay when I can afford it.

I’m on 1.73% and coming off in November
Best direct offer with lender I’ve had so far is

2 year fixed 4.70%
5 year fixed 4%

On a 60LTV product

Will be shopping around shortly

 

[dazzer6666]

Sorry, that’s not the case.

This is supply side inflation and the normal monetary levers don’t apply.

I haven’t saved a penny with these new rates. Firstly the banks haven’t applied the higher rates to savings and secondly I need to eat, travel to work and service the house. These rates have caused delays to my expense payments from my old job so, in fact, I’ve been dipping into my savings to live.

God help any youngster who just bought a house. The BOE need to bring rates down before there’s a proper recession and millions of repossessions

Savings rates have gone up quite significantly - 3.5% is widely available now on instant access accounts, more on notice accounts, PSB payout rate has gone up 5 times in a year etc

 

[nicko31]

Savings rates have gone up quite significantly - 3.5% is widely available now on instant access accounts, more on notice accounts, PSB payout rate has gone up 5 times in a year etc

Important to remember you can earn £1k p.a tax from a saving account as a standard rate payer. Barclays have a rainy day saver offering 5.12% for 5k and it will probably go up again

 

[Uncle Spielberg]

I’m on 1.73% and coming off in November
Best direct offer with lender I’ve had so far is

2 year fixed 4.70%
5 year fixed 4%

On a 60LTV product

Will be shopping around shortly

60% ltv, 4.29% fixed for 2 years. 3.93% fixed 5 years

 

[Muhammad - I’m hard - Bruce Lee]

Feel very fortunate we locked in for 2 years when the base rate was at 4% but feel less confident the rate will have dropped in July 2025 when we have to remortgage. Very worrying time for many I'd imagine.

A question for those who have buy to let's, is there incredible pressure to hike rents? The rental market in this corner of Dorset is mental. Very little available and rents are eyewatering.

A 3 bed house we rented in 2018 for 1.1k a month is now close to 2k!

I have a buy to let mortgage.
Set the rent for a 2 bed flat with garden and parking space at £1k a month in 2021 and haven't increased it.
I have good tenants in there who pay on time and look after the place so am keeping it as it is

 

[raymondo]

Whether interest rates effect inflation or not, the BOE are tasked with managing inflation to a Government target and are given one tool to achieve this (all other 'tools' being rather appropriately in Government)

And unfortunately, even if energy costs drop, with a further hike on an already huge food inflation figure due in October this year and no sign of a solution to this, I really can't see any decreases in interest rates for at least another 18 months. Whether they have topped out or not I really couldn't speculate

I think our interest rates may start decreasing within a year, but far more slowly than many 'Finance' or 'Government' commentators seem to think

 

[sydney]

I think our interest rates may start decreasing within a year, but far more slowly than many 'Finance' or 'Government' commentators seem to think (that's assuming they actually think ).

they don't give a shit , same here , the head of the BOE came out a couple of weeks ago and said pretty much " people are going to have to get used to having less money " a sentiment repeated 48 hours later by the furniture salesman in charge of the RBA.....bunch of cowboys laughing all the way to the bank , inflation doesn't bother them they're mostly minted and actually benefit from inflation ...caaaaaants....!!