Buy-to-let sector undeterred by rate rise
Posted: 17 Aug 2006 12:36:35 GMT
Rises in the interest base rate may not put Buy-to-let investors off buying additional properties, according to mortgage experts.
With figures released yesterday by the Council of Mortgage Lenders (CML) showing the record-breaking growth of the Buy-to-let sector, there had been concerns that this boom would shortly come to an end due to rising interest rates.
Many analysts believe it is possible that the Bank of England (BoE) will announce a further 0.25 per cent rise on September 7th bringing the base rate to five per cent.
However, Ray Boulger from John Charcol stated: "Although this month's base rate increase, and indeed the potential for another, will impact on investors' net yields, the astute ones will have factored in the possibility of one or two rises."
The volume of Buy-to-let mortgage applications for the first half of this year broke the record for the second half of 2005, with an increase of 17 per cent annually.
There are currently 767,000 outstanding residential buy-to-let mortgages in the UK worth a total of £83.9 billion.
"The fact that the Buy-to-let market has remained strong is hardly surprising, with continued strong rental demand," added Mr Boulger
"The plight of the first time buyer is clearly to the benefit of the Buy-to-let investor, and there is no real sign that this will change in the short term."