Sixth Bank of England Base Rate Increase for 2022

Following today’s MPC meeting, the Bank of England increased the Base Rate again. Should landlords be concerned about the property market?

The Bank of England has today increased the Base Rate to 2.25%, a 0.5% increase since the last MPC meeting in August. This comes as the sixth rise this year, with the ongoing goal to curb staggering inflation levels, which currently sit at 9.9%.

Recent forecasts predict UK inflation levels to peak at 18% in the early months of 2023, but despite this, predictions remain confident that the inflation rate should be around 13% at the close of this year. However, due to this, we do anticipate further a further Base Rate increase in November.

As a result of this latest rise, many specialist lenders will be increasing product offerings in the coming days – if they haven’t already in anticipation of today’s news. The likelihood is that the majority will have rates priced comfortably in the 5%s, maybe higher, and lender criteria could get even tighter to protect profit margins.

Despite what many deem worrying mortgage interest rate levels, the rest of the market appears relatively unfazed. The latest Landlord Panel Report reveals that average rental yields and gross rental income per property have increased. This has increased the overall estimated portfolio value for landlords, which reflects the longevity of property investments. Rental demand remains strong across the market, and house prices continue to rise, albeit slightly slower than the rate of growth we’ve seen since the start of the pandemic.

We understand this latest development can cause concerns, but we’re here to help. Our brokers are on hand to answer any queries you might have and can search the market for the deal that best suits your investment needs. If you’d like to discuss your purchase or remortgage options, please contact our expert brokers on 0345 345 6788, or submit an enquiry here.

22nd September 2022