Base rate decision & its impact on buy to let investors

Followings the decision by the Bank of England Monetary Policy Committee (MPC) to raise interest rates to 5.5 per cent, Mark Blackwell, Head of Corporate & Specialist Lending at C&G comments on the impact on buy to let investors: “Although this latest announcement from the MPC has been widely predicted, we have seen no drop off in the demand for buy to let mortgages over recent weeks. The continued rate rises throughout 2007 have not tarnished the currently robust buy to let market and existing landlords should not be alarmed by today’s somewhat inevitable rate hike.

“Following this most recent rise, the prevailing view amongst economists is that interest rates have now reached their peak. Inflation is expected to start falling back towards its two per cent target by the end of the year, providing a more stable environment for investors.

“There will be always be variances in the bank rate and in the short term investors may well feel the squeeze on the rental yield of their property. However, any buy to let investment should be viewed as a long term asset and over time they will reap the rewards.”