Inside this month’s edition our lead article on page 15 focuses on a topic at the core of many readers’ property investing strategy as we attempt to see beyond the current market turmoil to assess long-term prospects for the buy-to-let (BTL) sector. Average residential property values have risen by 20-25% in many parts of the UK in the last three years and average rents are also up sharply since the middle of 2021. As such it (BTL) is obviously not quite as gloomy a sector to be in as some in the wider media have been indicating, despite the undoubted challenges ahead.
As we go to print on this edition a cursory check of the key 5-year Sonia swap rate reveals that a 4.055% rate was available overnight for inter-bank lending, which compares to 5.189% a month ago. This trend reversal of over the last month has led to lenders revealing new and lower fixed rate deals, with Paragon Bank this week announcing revised HMO product lending with 5-year fixed rate deals for 70% LTV at 5.75%. All of which indicates that the previous marketplace led fear about ever-higher borrowing costs ahead has been reversed. Well at least for now.
By the time you read this article, Jeremy Hunt, the newly incumbent Chancellor of the Exchequer will on the 17th November have revealed his plans to reduce the large estimated hole in the government’s finances. Judging by recent press speculation, this could include even more tax being raised from private landlords. Not a prospect that many readers will welcome, obviously.