Base Rate rises to 1.75%

[Mark Rocks]

The latest news on the Base Rate is one that every investor will be keeping an eye on. Here’s what Rob B had to say on it; 

“Today’s news that the base rate has increased to 1.75% isn't surprising 

Increasing rates is a tactic that banks have historically used to curb rising inflation (which is due to hit 13% in October this year) and is widely covered in Rob D's latest book, ‘The Price of Money’. 

For property investors, the biggest impact will be felt with mortgages and we've already seen a number of lenders raise interest rates over the past few weeks. It's possible this will lead a change to more investors seeking fixed-rate products to safeguard payments against future hikes.” 

What impact do you think this will have on the property market?

[george-choy]

I think we will see a huge increase in remortgaging for 5 year fixed rate mortgages, as landlords get concerned about further rate rises.

However, at the same time with the house market still growing strong, and the mortgage affordability test having been removed on home mortgages, I feel the market is likely to continue to rise further despite the recent rate increase.