Bank of England halts further rate rise
The Bank of England’s Monetary Policy Committee has made a big decision – after 14 consecutive rate rises, they have voted to keep interest rates static at 5.25%. Though the decision was split amongst investors and business leaders prior to the September meeting, the vote was passed by a slim majority of 5-4. Those who wanted to increase the base rate by 0.25% to 5.5% were overruled.
This comes only a day after the ONS reported that inflation had dropped from 6.8% in July to 6.7% in August – a small but encouraging sign, despite fuel prices rising 5p a litre in a month. Will this be the start of a downward trend? We’ll have to wait and see.
have we hit the peak?
The impact of the interest rate announcement can’t be overstated. It looks like we may have hit the peak of the interest rate cycle, and this news will help to restore confidence in borrowers, who now have a better idea of where they stand and what mortgage pricing is going. In fact, many lenders have already announced reductions in rates for residential and buy-to-let products by Monday 25th September.
It’s yet to be seen whether this will lead to meaningful house price growth. According to the ONS’s July house price index, the average UK house price increased by 0.6% in the 12 months to July 2023. This provisional estimate is down from a revised 1.9% in June 2023, with the average UK house price currently standing at £290,000 – £2,000 higher than a year ago, but £2,000 below the peak in November 2022.
affordability remains key
Meanwhile, affordability remains a key issue for landlords and investors even as interest rates start to plateau. Maximising an asset’s potential can help to increase its yield and balance out expenses and outgoings. Sometimes, a light refurb can help achieve this while other times a more intense renovation – or even converting a single residence into an HMO – may be more relevant.
how MT Finance can help
At MT Finance we have a variety of bridging loans available which have been designed to give you fast access to funds with minimum effort. This includes our heavy refurb product which is available at up to 65% LTV. We can also provide up to 100% of build costs while further draw-downs can be accessed, allowing you to borrow more as the property’s value increases.
Each bridging loan can be exited and repaid in full at any point after one month without incurring any early repayment charges or exit fees. This allows for greater flexibility and provides you with increased control. There are also three options when it comes to making interest repayments, including serviced, retained or part and part. Retained means no monthly payments until the end of the loan while serviceability allows clients to borrow more. Part and part is a combination of both.
key features of our heavy refurb bridging loans:
- Up to 65% LTV
- Loans from £50,000
- Terms from 1-24 months
- Residential and semi-commercial property
- No exit fees or ERCs
- 100% of build costs available
- Further draw-downs available