Interest rate drop good for existing landlords

Buy-to-let landlords may see their mortgage interest rates fall as a result of the recent cuts by the Bank of England.

landlords with tracker mortgages will “immediately benefit” from the recent 0.5% interest rate cut, according to Keshay Thukaram, the managing director of smartlandlord.co.uk. However, a less positive reaction came from the National Association of Estate Agents which called the base rate cut “an exercise in spin” intended to distract from the real issues faced by the property market, that the government is yet to face up to.

Buy-to-let landlords are likely to received higher rental yields as a result of the Bank of England decision as they will have to use less of the rental income to cover mortgage repayments.

However, Smartlandlord.co.uk does urge landlords to bear in mind that house prices are still falling and this could affect the return on their investment. Thukaram says,“[landlords] need to take extraordinary steps in these extraordinary times to safeguard their investments."

The website says it is now monitoring the situation for buy-to-let landlords in order to measure the risk of repossessions, missed rental payments and mortgage arrears, which are all issues that landlords could be faced with during the economic slow-down.