With the base rate rising and lenders changing interest rates regularly, a popular question we get asked is: “If the base rate hasn’t moved, why has the interest rate available from lenders gone up?” or “The base rate went up, but lenders haven’t changed their rates. Why is this?”

Many factors play into making an interest rate. Often lenders will tweak their rates to ensure they are not market-leading, as they wouldn’t be able to cope with the volume of applications, but other economic factors can play into it too. With the majority of mortgage products being fixed rates, lenders look to swap rates to assist them in their pricing.

In the current landscape, increasing portfolio yields is an important focus for many landlords. There are a number of options to consider, including investing in a range of property types in order to diversify your portfolio. Houses of Multiple Occupation (HMOs) are generally viewed as an attractive alternative to standard buy to lets and so it’s not uncommon to find landlords looking to convert properties from single family buy to lets into a house of multiple occupancy (HMO) to get the most out of their investment. 

Here we are already at the end of August and it certainly feels to me as if the summer has flown by. What a month it’s been! Not only did August bring us some hoped-for sun (well, a little more than July at any rate), it also brought a raft of new products to the market. Despite the base rate rise at the start of the month, many lenders have been refreshing their propositions with rate reductions and making additions to their ranges to better support a range of consumer needs.

At the start of the month, Vida Homeloans announced rate cuts of up to 40bps across its standard, HMO/MUB, expat and fee saver 2- and 5-year fixed ranges and its 2-year variable range. Rates now start from 6.29% for a standard 5 year fixed up to 75% LTV in the ‘Vida 36’ tier. This comes with a 4% fee and a maximum loan size of £1m.

Everything is going up. Most of us have felt the pinch on our pockets resulting from the cost of living crisis and increasing mortgage rates. This can have a massive impact on stress levels to the extent that it can also affect people’s ability to work. Financial advisors have a duty to step back and take the time to explain to clients the possible impact of stress on household earnings. After all, if you were signed off work due to stress, how would you be able to keep up to date with your financial commitments?

Landlords have had to endure a somewhat negative perception over the years but, by and large, this is a community who are keen to demonstrate their ongoing support for tenants. A positive feature which was especially apparent over the course of the pandemic and increasingly so during a period when a host of additional financial burdens continue to impact household finances across the UK.

No household or business across the UK has escaped the escalating costs of an array of goods, services and borrowing over the past six to twelve months. Of course, the impact of this additional financial pressure will vary from individual to individual and from business to business but in the wake of an eleventh consecutive interest rate hike, the impact on residential buyers, landlords and even tenants is evident.

According to new research from Octane Capital – which analysed the current cost of the average buy-to-let mortgage and how this monthly repayment has increased in the last year – the cost of maintaining a monthly buy-to-let mortgage interest payment has climbed by 75.7% in the last year, with those making a full mortgage repayment each month seeing an increase of 31.6%.