Buy-to-let investors 'should plan for another rate hike'

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Buy-to-let investors 'should plan for another rate hike'

Fri 12th Jan 2007

Potential buy-to-let property investors should factor another rate hike by the Bank of England into their planning considerations this year, experts have suggested.

A spokesperson for the Association of Residential Lettings Agents Malcolm Harrison has urged those thinking about entering the buy-to-let market to decide whether they will be able to afford mortgage repayments should the base rate rise once more in 2007.

His comments come a day after the base rate increased by a quarter point to 5.25 per cent, the third rise since August inclusive.

Mr Harrison said: "When you keep having interest rate rises there is a bit of a 'drip-drip' principle that makes people wonder about affordability.

"Having said that, most buy-to-let investors actually do their sums quite carefully, give themselves a cushion and work it out according to the interest rates."

The rising interest rates could signal a worrying scenario for some homeowners in terms of paying back their house loans and the Royal Institution of Chartered Surveyors has claimed that over 50 families a day could see their homes repossessed due to the amount of debt they have accrued.

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