WAQAR KHAN, Lendinvest's BDM for the North West, shares his thoughts on last month's government announcement.

At the start of this year, I wrote about the opportunities for property investors in a regenerating North West, citing recent government announcements around the ‘levelling up’ agenda as cause for confidence in the region. 

A couple of weeks after the government cancelled the Manchester leg of HS2 however, how relevant does this remain, and what should property investors looking to the North West do in light of this sudden change in government policy? 

Private vs Public Investment

With the latest Bank of England base rate announcement behind us and no immediate change on the horizon, it will certainly be interesting to see how quickly lenders make rate adjustments in the coming weeks. This month has already seen many price reductions and the trend is likely to continue. It’s been positive to see lenders focusing on new options to support affordability, particularly with respect to the introduction of a variety of lower rate/higher fee products. Let’s kick off this month’s round-up with an example of just that.

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?