What do these interest rate rises mean?

Let’s discuss the new Bank of England base rate rise!

And so it’s arrived, the Bank of England base rate now at 0.75%. In real terms that means an increase of £12 a month on a mortgage of £100,000.

Although it was a shock that the 2nd of August was the day it rose, it wasn’t as if it’s not been coming for a while.

I predicted that it would happen November time, but here we are.

More than ever 5 year fixed terms are looking strong. Knowing that you are set for that long means that you can budget accordingly… and if you feel like it you could keep your rent the same for that period without any significant hikes… your choice.

Predictions are rife that rates will go up again in March 2019 so nows the time to start seriously looking into your mortgage products.

I’ve been very aware that UK interest rates do follow American trends and with rates rising across the pond I think all too soon rates here will be at least 3.5% – 4.5% for BTL mortgages.

The biggest wake up call here will be to see the impact interest rates have on our taxes as landlords. Evidently it’s concerning that landlords will increasingly be able to deduct less and less mortgage interest from their rental income, whilst having no control over the cost of interest.

It really is time to grab your accountant and look at the amount of tax you will be paying vs how much it will cost to transfer your assets to a Ltd company or simply sell. More than ever you need a plan, a robust one. Whilst I wholeheartedly believe property investment is still an awesome way to make money, you have to have a good strategy as without one your properties can cost you, rather than support you.

Are the hikes in interest concerning for you? Comment below!

If you are ready to work out how much the tax changes are going to impact your profits you are going to need to jump into the Members Club and use the calculator tool.

Natasha

How are you going to find these changes?