PFL in the News
2nd February 2008
Rate Drop A Certainty Say Forward Looking Investors
Over 70% of buy-to-let investors are confident that interest rates will decrease over the next twelve months, according to Property for Life’s monthly investor confidence tracker.
Long term investors can see beyond any alight house price decreases in 2008 and are looking to interest rate cuts to buoy confidence. As a result, the tracker also shows that 69% of investors are certain that now is a good time to buy investment property.
The predicted drop in interest rates is widely expected to begin with a reduction in the base rate at the Monetary Policy Committee’s meeting next Thursday 7th February. Over 80% of those polled believe that an interest rate rise is unneccessary given the current economic climate.
David Austin, managing director of Property for Life, comments: “The US Federal Reserve’s decision to slash the interest rate twice within nine days has fuelled further speculation that the Bank of England will cut our base rate in February. This is bound to inject investors with further confidence and if a drop is announced, the financial pressure should really begin to lift.
“We expect the buy-to-let sector to underpin the housing market this year and all the signs are that landlords and professional investors are looking to add to their portfolios at a time when it is easier to negotiate lower property prices. Now is a great time to buy and long term investors will not be affected by any slight drop in prices that we might see this year.”
However, the percentage of property investors admitting to feeling the pinch has seen a slight increase since December, with just over half believing that their finances are still being stretched by their mortgage repayments and other financial commitments.
David Austin continues: “December’s base rate drop has not yet been fully passed on to property owners, but the debate on the wider economic climate may cause investors to feel the need to be more than ever on top of their finances.”
