Have you given much consideration to a rise in UK base rates?

[nmb]

While there have been a number of false dawns from Mark Carney, the Governor of the Bank of England, it seems as though UK base rates will increase in 2016. As a property investor, have you given much consideration to a potential rise in financing costs and how this may impact your investments?

 

[Nicholas Wallwork]

It's a major consideration, rising rates means profits are directly effected. We are reducing the risk by moving finished projects to commercial lenders with 20 year fixed rate loans (interest is around 5%). The down side is that they are capital repayment so our immediate cash flow is effected but we are looking long term so it's just like putting more money in savings each month.

 

[Judith Beilby]

I think that most sensible property investors would stress test sites based on realistic market interest rates rather than the record lows we have experienced for the last few years. In that case profits should still be robust after a return to the 5% average.

 

[Ricky Bhurji]

My advice is to "Up your yield" - this should generate plenty of cash flow which should hedge any rises in interest rates.