…even as some banks reduce fixed-rate mortgage costs
Hard though it is to believe after the Bank of England has increased its base rate for 14 consecutive quarters from an all-time record low in December 2021 of 0.1% to 5.25%, there is some good news about mortgage rates! Several of the biggest banks are cutting the cost of fixed-rate mortgages on a range of packages for new and existing customers.
But how? After all, although the latest inflation figures are a little better than expected, experts still expect another base rate rise to 5.5% on September 21st because wage growth is still running slightly above the inflation rate (7.8% in the 3 months leading up to June). Well, the reason 6 or more of the major banks, including Barclays, HSBC, NatWest, and Santander, can offer reductions (Santander’s is 0.29% for example) is that the banks ‘swap rate’ remains at 5.25% and is on a downward trend. Since this is the rate they charge on money lent by one bank to another, they have some wiggle room to pass on in an attempt attract new customers (or retain existing ones). But why would landlords signed up to the Abel Living Guaranteed Rent for Landlords scheme be bothered either way? After all, one of the scheme’s biggest advantages is that changing mortgage rates don’t affect the rent you’re paid each month. The answer is, of course, that this means every reduction in the mortgage rate you’re paying amounts to a modest pay rise for you!
That’s just one of many benefits landlords enjoy when they add their property or properties to our pool of homes for the social housing sector. Undoubtedly the most compelling is that it offers complete peace of mind, simply by paying you an agreed rent on the dot, every single month without fail for your full contract term of up to five years. It’s also completely hassle-free. When you hand over the keys, you also hand over all the stress, pressure, and day-to-day landlord’s hassles! That includes advertising the property, sourcing, interviewing, and selecting tenants, carrying out regular and frequent inspections to make sure your property’s being looked after, and even handling repairs and maintenance.
Best of all, you get your rent whether or not the property’s actually been let and even if the tenants are in arrears or facing eviction! And there’s also the bonus of feeling good about yourself because you’re doing your bit to ease the social housing national shortage.
To sum up, with the Guaranteed Rent for Landlords scheme you really do have the best of both worlds – a stable income along with the possibility that reduced rates will present you with a modest ‘pay rise’ from time to time!