08-06-2007
Buy-to-let investors hold their nerve
Buy-to-let property investors are showing signs of confidence and stability despite declining rents and rising interest rates, with many landlords looking to the longer term rather than focusing on current pressures.
The National Association of Estate Agents (NAEA) reports that growth in rents has slowed, having risen by only 1.8 per cent, but nonetheless investors appear to be holding their nerve, according to the Times.
Higher rates spell increased mortgage repayments for borrowers on standard variable rate deals, including buy-to-let investors.
With rates presently at 5.5 per cent, their highest level since April 2001, concerns have arisen over the ability of landlords to cover all costs, particularly in light of declining rents.
These fears are largely exacerbated by speculation that rates are due to increase by at least a quarter-point by the end of the year as the Bank of England seeks to curb consumer inflation.