Landlords brace for more interest rate hikes in 2022

Landlords braced for more interest rate rises in New Year

The Bank of England raised interest rates for the first time in more than 3 years in response to calls for soaring prices.

This week’s data rose from 0.1% to 0.25%, which shows that prices are rising at the fastest rate in 10 years. Despite concerns that Omicron variant may cause people to reduce spending and slow down the economy, it has emerged.

Therefore, landlords are preparing for higher borrowing costs.

Chief executive of online mortgage broker Property Master, Angus Stewart says: “It looks as if even the intervention of the Omicron variant could not throw the Bank off its chosen path. Now the process of rising rates has begun, we should brace ourselves for further increases in the New Year… What we can say with certainty is the availability of low buy-to-let mortgage rates has to a large extent obscured the pressures on landlords operating in the private rented sector”

The bank’s Monetary Policy Committee voted 8 to 1 in favour of the increase.

Since interest rates were cut in March last year due to the impact of the pandemic, interest rates have been at a historical low of 0.1%.

Economists had expected the Monetary Policy Committee to raise interest rates at its last meeting in November, but policymakers voted to suspend the implementation. This time, analysts expect further delays due to Omicron, but the committee’s thinking is different.