Historic Interest rate rise will hit Property owners

Industry Insight, Accountants & Bookkeepers November 2nd, 2017
Historic Interest rate rise will hit Property owners

Arthur takes a look at the historic interest rate rise by the Bank of England and the affects it will have on the property market.

The Bank of England ‘hiked’ interest rates up to 0.5% today. This is the first time interest rates have been increased in over a decade and the first time around 8 million homeowners have experienced an increase since taking out a loan.

Property Owners

If you have a mortgage, you’re going to start paying more. The interest rate rise will see mortgage holders pay an average of £21 a month extra in repayments for a £150,000 mortgage. This doesn’t sound like a lot, but it is still an increase, which is never welcome. For those with larger mortgages, the number will increase significantly. If you’re on a fixed rate, you’re safe…for now. But, research shows that most people on a fixed rate mortgage are on relatively short term ones, meaning you’d best keep abreast of what’s happening.


For tenants the news is bad, with a little bit of good thrown in there. For a lot of new renters, the rent will go up as Landlord’s look to pass on the added costs to their tenants. However, there is some good news! Whilst the amount of rent you pay, the interest you get on your savings is going up! This may be little consolation, but it will still benefit tenant’s that save in the long run

Property Investors

Prices will now inevitably go up. Owners will now look to get more of a return on their property, especially as they will have to pay more on their mortgage! For smaller investors, you’ll find it harder to find a good deal in terms of a mortgage, with some of the larger banks, such as Santander, already dropping their lowest mortgages from their roster. Furthermore, the amount of money investors are able to secure is likely to drop as banks act more cautiously when lending.

Having said all this, there’s probably not going to be much benefit in waiting to invest, and 0.5% interest on a loan is still very low.


If you’re a property owner or you manage properties for someone else, you’ll gain a lot of valuable advice and assistance through using an Arthur accredited advisor. These are generally accountants and bookkeepers with a speciality in the property market, so they can help you react to issues such as interest rate rises and the like.

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