After a spending the week debating which way the Bank of England would rule – the verdict is in. For the next three months, the base rate will remain at it’s all time low of 0.1%.
What can we now expect to see from the market?
With reduced rates looking to be the key feature of the mortgage sector for the next quarter, we can expect to see a large push from borrowers who wish to re-mortgage, raise capital or switch to a fixed rate mortgage.
Who does this benefit?
The continuation of the reduced base rate will remain in buyers’ favour, encouraging the property industry to remain as a consumer market. Whether you’re a first-time buyer, an experience landlord or a property investor looking to build your portfolio, the low Bank of England Base Rate will likely see a continued increase of mortgage applications into lenders before the anticipated base rate increase which was largely covered in the media last week.
How can you take advantage of this?
Finding the right mortgage for you is very important. For those looking to purchase or review their mortgage, now maybe he right time to do so.
Whilst the Bank of England has decided to remain with the current base rate, there is no certainty as to how long this will remain in place after the extended 3-month period.
However, this decision also creates a few added advantages in favour of fixed rate mortgages:
For those coming to the end of their term on their current mortgage, the timing couldn’t be more perfect.
It provides you the opportunity to remain on a lower mortgage rate for longer, but that’s not all.
Re-mortgaging provides an opportunity for a borrower to raise additional funds against their home if they are considering buying an investment property or general refurbishment works.
Raising capital for refurbishment purposes, could be partially beneficial for landlords.
By 2025, buy-to-let properties will need to have an Energy Performance Certificate (EPC) rating of ‘C’ or above for new tenancy agreements.
This regulation will apply to all existing tenancies by 2028.
To meet the new standard, landlords could take advantage of the low rates to refurbish their property now, instead of waiting closer to the time.
A lower EPC rating will likely also attract more buyers or tenants. Not only will the property be more eco-friendly, a lower EPC rating will also potentially reduced utility bills, particularly during the winter months.
In October 2021, The Guardian released the latest findings from Cornwall Insight, forecasting a 30% increase in energy bills for 2022.
Buy-to-let properties that offer lower bills for their tenants is highly attractive, putting landlords in a prime position, particularly if the energy price cap continues to rise.
Newly refurbished property can also help attract new tenants whilst simultaneously offering the property owner to charge a premium on the buy-to-let asset – which in turn could help pay for the refurbishment works.
Building a portfolio
For those looking to build up their property portfolio or simply invest in a buy-to-let assets, then now could be the ideal time to take advantage of some of the low mortgage deals currently available.
As buy-to-let mortgages are usually ‘interest only’, the continuation of the 0.1% base rate provides an opportunity to lock in a low fixed rate and benefit from the low rate therefore save money in the long-term.
How can Loans Arena help?
In the 20 months since the Bank of England announced the reduction of the UK base rate, the property market has changed dramatically.
In March 2020, the UK average property price stood at £231,855 – since then, we’ve witnessed an increase of 13.97%, as it currently stands at £264,244 by the end of August 2021 according to the Office for National Statistics.
Loans Arena has access to exclusive interest rates via one of the country’s leading Mortgage Networks, Primis.
Whether you’re looking to build your property portfolio, re-mortgage within the upcoming three months or you’re interested in learning how much capital you could raise – we’re here to provide you with your perfect mortgage solution.
For those seek alternative finance such as bridging loans, for short-term finance requirements as an alternative method to raise money for a deposit or to avoid a long property chain.
Loans Arena has access to bridging & commercial lenders who are currently active in the market.
Speak to our team of mortgage advisors today at https://loansarena.com/contact-us/ to find out more.