You are here: Home - Mortgages - Buy To Let - News -

Buy-to-let sector at risk from interest rate rise

0
Written by:
18/10/2013
Mortgage lenders need to be aware of the knock-on effects of struggling buy-to-let borrowers, a consumer advice boss has warned.

During a debate at the British Bankers’ Association conference, Citizens Advice chief executive Gillian Guy warned a future rise in interest rates could have an impact on landlords as well as owner-occupiers.

She told Your Money sister publication, Mortgage Solutions: “Some landlords will have the finances to cushion any interest rate increases, others may not.

“The knock-on effect of landlords not meeting their mortgage payments is that tenants could face losing their home. For some it could mean uprooting their family and moving children from their schools.

“Lenders need to be aware of the chain of events that could follow if landlords struggle to cope with rate rises.”

In August, the Bank of England issued forward guidance. This suggested the Bank base rate was unlikely to rise from 0.5% before the unemployment rate fell to 7%.

While the central bank’s governor Mark Carney has hinted this could mean no rise until 2016, market commentators have predicted it could come earlier.

Questioned separately on the subject, RBS interim chief executive Les Matheson told the conference audience the bank’s customers were well placed to deal with an interest rate rise because the question was included in the affordability test.

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

Your rights for refunds if travel is affected by strikes

There have been a wave of strikes this year across many different industries, and more are planned over Christ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week