Increased interest rates are impacting on clients with mortgages as part of rental portfolios – with some inquiring about whether they should sell.
The Bank of England has announced a half per cent rise to 5% on its base rate but fixed term mortgages are already being calculated at around 6%.
The announcement is the 13th successive rise in the base rate as the Bank uses it as a lever to bring down inflation. It stayed at 8.7% in May.
Partner Alex Douglas said the interest rate rise was impacting on many clients.
“Those with mortgages as part of a rental portfolio are being squeezed and asking us to crunch the numbers to see whether it is remains worthwhile to stay in the sector or sell,” Alex said.
“But it is not just in this sector that clients are feeling the pinch.
“Businesses which have borrowed money are seeing costs increase. Those due to take out loans to invest are thinking again.
“Everyone's circumstances are different and that's why, where interest rate rises are impacting on individuals or businesses, it is worthwhile talking to your contact at RNS.”
One area where clients could benefit from the rate rise is if they pay tax due to HMRC early.
Its repayment interest rate – paid to taxpayers when they overpay or pay early - was increased to 3.5% from 31st May.
Late payment interest, encouraging prompt settlement of tax owed, was set at 7% on the same date.
Both are due to increase with the latest announcement from the Bank of England. The late payment interest is set at base rate plus 2.5% and repayment interest, set at base rate minus 1%.