Mullucks Wells
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Mullucks Wells Warns Interest Rate Hike Could Mark a Sea Change in Investors’ Fortunes
Mullucks Wells has warned that investment purchasers could be at risk, following the decision by the Bank of England's Monetary Policy Committee to raise interest rates by 0.25% to 5.5%.
Director William Wells said: “Today’s announcement will send shock waves through the whole housing market – but especially amongst the Buy to Let community. We’ve been preparing ourselves for a hike like this since last month’s announcement that inflation had reached 3.1%, breaching the Government’s target.”
Today’s rise in the base rate is the fourth in nine months. William Wells explained that the individual reaction of buy to let investors would depend on whether they held a long or short term view of their purchases.
“There will be those who are well funded and fully prepared for such a turn of events,” he said. “Whilst being disappointed, they will see this as an occupational hazard, and continue to regard their investment in the long-term.
“However, there will also be some who are geared very highly, with small deposits and no contingency funds available. For those people, today’s decision could mark a sea change in their fortunes.
“Of course this will also be a massive blow to first time buyers, many of whom are already struggling even to get a foothold on the property ladder.
“However, as estate agents, we will continue to do what we have always done: that is to advise people to consider their property purchases carefully, and make sure they are well within the realms of affordability.”
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