Opinion: How interest rate changes affect property investors
Paul Harrison, Managing Director, gives his thoughts on how changes to interest rates in the UK affect buy-to-let investors.
Yesterday it was announced that the rate of inflation in the UK has increased the cost of borrowing from 0.25% to 0.5%. It's not a surprise, as in reality we’ve been expecting it for 8 years. There have been a number of false stories around when the change would happen but in reality, the Bank of England had no choice but to make the change because of rising inflation.
After the announcement sterling dropped more than 1% to $1.30 and the euro climbed by a cent to nearly €1.12 in response. Any drop in sterling is a positive measure for buy-to-let investors based outside of the UK who are looking for opportunities. Not forgetting that any drop in sterling is likely to encourage a surge in exports.
So what are the positives of the interest rate change for buy-to-let investors? For those property investors, particularly those who have a long-term buy-to-let strategy, this is unlikely to knock them off course. It would be unthinkable for another rate rise to happen come the short to medium-term and unless something drastic happens, rates won't go up for a year to 18 months. Investment in property, particularly in Liverpool, Leeds and Manchester will continue to offer the financial gains to make this type of investment worthwhile.
Speak to one of the team in the UK (+44 (0) 113 380 8930) or Hong Kong (+852 3746 2200) about property investment in 2017.