Lee Grandin, managing director of Landlord Mortgages, the specialist buy-to-let broker says more investors will be moving onto fixed rate deals, following the interest rate rise to 5%.
He says: “The effect of this increase will of course be felt by those who invest in residential property. We have already seen how some lenders have withdrawn best buy products and future products in anticipation of this increase are unlikely to be as attractive as they have been over the last year.
“However, investors should not be put off and we expect many landlords to take advantage of current fixed rate deals to secure themselves against further increases. This rise has been expected and cautious investors will already have planned for it.
“When investing in residential property we continue to advise potential landlords to be prudent. All properties need to achieve a return which will cover at least 115% of the mortgage repayment in order to make it a viable financial option. As a result all aspects of the property need to be considered, both intrinsic and extrinsic to avoid financial headaches further down the line.”