When Will Interest Rates Go Up?

August 26, 2015

Do you remember the news headlines about interest rates just over a month ago?  On 17 July 2015, The Governor of the Bank of England Mark Carney warned the nation that the decision to raise interest rates “will likely come into sharper relief around the turn of the year.”   Unemployment figures for July had plateaued at 5.6% and with some sectors claiming they are struggling to recruit, wage rises had crept up to 3%.  The current inflation rate of 0.1% has largely reflected falls in food and oil prices that began in Autumn [...]


Five Years In Prison

August 6, 2015

I’m in Madrid this week and I’m struck by the level of interest here in the Calais frontier debacle and humanitarian crisis.  There are regular updates on TV news and the national newspaper El Pais featured a full page article on the government’s latest proposals for yet another Immigration Bill.  Even the waiter in my local café was telling me about the five year prison sentence that awaits UK landlords.  Of course the logic that there is an immigration crisis in Calais and the answer is to send landlords to prison for five [...]


London Councils Continue To Ban Sharers

July 30, 2015

Whenever I tell people who are not versed in the intricacies (or lunacies) of housing policy that four north east London boroughs have banned landlords from letting to sharers, they respond with disbelief.  How can a council be allowed to tell you who you can rent a property to?  And why should they discriminate between people who are related and unrelated.  This little known law was created in 2010, when out-going Labour Secretary of State John Denham created a new planning use class C4.  Sounds very boring and technical I know and this [...]


After The Budget

July 16, 2015

The chancellor pulled a number of rabbits out of the hat in his Summer 2015 budget statement.  Although many column inches had been dedicated to the loss of buy to let tax ‘perks,’ the landlord community was not expecting the measure to actually materialise.  Until April 2017, landlords will be able to set all mortgage finance costs against rental income, but thereafter relief will only be applicable at the basic tax rate, albeit phased in over 4 years.  The big questions are who will this affect and will it cause landlords to sell [...]


Buy To Let Is A Business Not An Investment

July 7, 2015

In its latest Financial Stability report the Bank of England commented that buy to let could pose a risk to financial instability, especially if interest rates rise.  The theory is that this could cause landlords to fall into negative cashflow, where their rental payments no longer cover the cost of the mortgage payment.  This could force them to sell in a hurry, potentially destabilising the housing market.
The evidence tells us that this is highly unlikely.  Most buy to let lenders currently assess applications at 125% rental coverage at a notional mortgage rate of [...]