Press Release Summary = Although many have speculated that the main reason the Bank of England\'s recent base rate rises were implemented was to tackle the rising house prices throughout the UK, it appears that they may not be having the desired effects. So will 1.25 per cent here or there really discourage buy-to-let investors?
Press Release Body = Although many have speculated that the main reason the Bank of England\'s recent base rate rises were implemented was to tackle the rising house prices throughout the UK, it appears that they may not be having the desired effects. So will 1.25 per cent here or there really discourage buy-to-let investors?
According to the Royal Institution of Chartered Surveyors\' (Rics) most recent housing market survey, there have been 17 consecutive monthly rises in house prices - with March seeing acceleration in activity. In March, 25.5 per cent more chartered surveyors said there had been a rise, rather than a fall in interest. This is up from 24.8 per cent in the previous year.
The largest rises were recorded in Northern Ireland and Scotland, while the north-west also performed well and London overcame its recent slump to record a rise in prices. However, price rises were slower in the north and East Anglia.
Jeremy Leaf, a spokesman for Rics, said: \"The housing market has absorbed the initial interest rate barrage.
\"House prices are unlikely to fall in the short term while the economic outlook remains robust.
\"Market conditions remain tighter than ever with households as yet under no pressure to sell.\"
The expert did state, however, that some people may find that their mortgage repayments will be more punitive given the recent rate rises. Furthermore, future rate rises may have the desired effect in dampening the market, he added.
Indeed, this trend of continual growth in the mortgage market seems to be reflected throughout the various sectors, with reports indicating that buy-to-let portfolios are continuing to grow, as property investors appear not to be fazed by the three recent rate hikes.
Figures from Paragon Mortgages, which specialise in providing financial solutions to landlords, reveal that buy-to-let property investors have more properties, on average, than they did before the base rate rose. In November 2006, the average properties per landlord was 10.2, rising to 11.1 in February, according to the company. Furthermore, the average value of these portfolios rose by seven per cent - indicating that buy-to-let investors are still on to a winner.
Perhaps driven by higher rental demand as first-time buyers increasingly feel that the slippery first rung of the property ladder is out of their reach as the rate rises start to bite at the cutting edge of the market.
John Heron, managing director of Paragon Mortgages commented: \"Their [landlords\'] confidence is a good indicator of current conditions - they know that tenant demand is pushing rents and yields upwards and remain confident in the long-term.\"
So it seems that when it comes to rate rises, buy-to-let investors may be cashing in, rather than pulling out.
2025
