There are some changes that are coming to Buy to Let mortgages and rules relating to these but this is not as a result of the vote - just that the Regulator (the Prudential Regulation Authority) wants to exert an element of control and uniformity to the sector. I will cover these changes in a separate update shortly.
The Bank of England has decided to meet every 8 weeks now rather than every month so this at least gives us some breathing space between the tension as to what will happen with interest rates! The next meeting is in November so we haven't got long to wait now.
The biggest issues around today are the falling pound and inflation which are inextricably linked at present. Usually when inflation starts to go above the target dictated by the government of 2%, there is a call for interest rates to rise so that we have less money to spend which curtails the increase in prices. This does not seem to be the plan this time as the Governor of the Bank of England has indicated that even if inflation does rise due to the falling value of the pound, they are prepared to overlook this and keep interest rates low. Bonus!
Indeed, it is still possible - and much considered - that there may even be another cut in rates from the 0.25% that the Base Rate lies at now.
This can only be good news for borrowers but will leave savers with nothing to show for their deposits.
What is going to happen to interest rates in the medium to long term?
Predictions over the last few years (including my own on these pages) are unfortunately extremely unreliable in the current market conditions.
However, Trading Economics are being bold and still trying to give us a guide. They believe the Base Rate will remain at 0.25% for the rest of this year and will still be at the same level in 12 months time. By 2020 they think the Base Rate will be at 1.0%. That's a rise of just 0.75% in the next 3 years which would seem reasonable and a good outcome for those of us with mortgages as that level of increase will hopefully be manageable.
What about the housing market?
Both Halifax and Nationwide report that house prices rose again in September. But not by much.
September 2016 - increase of 0.3%
Annual Change - increase of 5.3%
September 2016 - increase of 0.1%
Annual Change - increase of 5.8%
Quarterly Change - decrease of 0.1%
They agree that the market is slow with few buyers and few homes for sale. Halifax state that the housing market has followed a steady downward trend over the last 6 months with clear evidence of activity levels and price inflation slowing. On the positive side, they believe that low mortgage rates and the shortage of properties for sale should help support current price levels over the coming months.
Just to make it clear that the market is not at its best at present, the stock of properties for sale fell again and according to RICS, it remains around the lowest levels ever recorded.
So if you want to help and are unsure as to whether to put your house on the market - do it! There isn't much else around and so you could have plenty of offers before you know it! Just test the market and see...
In the meantime, keep working hard and I will post some more details on the Buy to Let changes shortly and another market update when the Bank of England have made their announcement in November.
Remember, your property is at risk if you do not keep up repayments on your mortgage.