Date Published 07 May 2022
A second recession in the last three years could be on its way as interest rates have gone from 0.75% to 1%. This is the 4th base rate rise in a row. The Bank of England has warned that inflation could top 10% in the forthcoming months and due to this, later in the year the public may have to reign in their spends for Christmas.
This will hit Landlords as higher borrowing costs, increased regulation, and a climb in taxes may give them further reason not to invest in a property. For Estate Agents they might see Landlords choosing to exit the market meaning fewer supply of private rented properties.
Even worse it creates more pressure on first-time buyers who are already grappling with sky-high rents. The 0.75% to 1% means that a mortgage borrower with between £100,000 and £200,000 outstanding on their mortgage would see an increase of £20 to £40 more a month. The majority of existing homeowners who are benefiting from fixed-rate mortgages will not be affected by this immediately.