Interest Rates Increased by Bank of England
The Bank of England announced yesterday that they are raising interest rates from 0.5% to 0.75%. Whilst this is good news for savers, who are likely to benefit from improved returns, many are sceptical of the effect that it will have on borrowers; those on a low income will be hit hardest by inflated mortgage and loan repayments.
Savers
Now is a great time for savers to shop around for the best deal, as banks will be reviewing their rates. However, high street banks are unlikely to pass the full increase over to customers, and returns on savings products will remain modest as ever. According to figures released by the BBC, ‘no easy access savings account at a major high street bank pays interest of more than 0.5%’.
For those looking to get more from their money, it’s prudent to consider how a lower risk investment might help to achieve this. First time investors may wish to look for property-backed opportunities, with medium interest rates and a low minimum investment whilst they build confidence – for example, Kuflink offer up to 7.2% interest pa* and with over £21 million invested through their platform to date, there have been 0 investor losses!
Borrowers
Although previous rate rises have often not led to an equal rise for borrowers, they do tend to mean an increase in repayments. The BBC states that, for a £150,000 variable mortgage, the annual cost is likely to increase by £224 – not an insignificant sum for those already struggling.
So, what can you do if you’re concerned about how you’ll meet this sudden increase in outgoings?
One strategy is to take time to map out your financial aims, and how you’ll achieve them. Consider how budgeting, saving and investing could move you closer to your goals. Even if increasing your income isn’t a viable option, there are plenty of ways to make your existing funds work harder for you!
*Capital is at risk. Past performance does not guarantee future results.
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Socially Responsible Lending: From Borrowers to Investors
In 2018, there will be a shortfall of around 3,000 care home beds in the UK, with significantly more places closing than opening each year. As a population, we are living longer and many of us will need residential care throughout our golden years, creating a demand for services that we simply cannot meet with the current provisions.
With this in mind, Kuflink Bridging was delighted when we were approached by property developers looking to secure finance in order to convert a former hotel into a care home. The developers have over 40 years of industry experience between them and had put together detailed plans for their 47-bed care home, which will benefit from fantastic facilities and a modern, comfortable environment.
We agreed a c. £1.2m loan with the borrowers, which has been drawn in tranches to fund each stage of the development. The loan, ‘Green Lane IG3’, was secured by way of a first charge and an independent surveyor has certified that progress is coming along well.
Kuflink are extremely proud of our own responsible approach to lending, and are sure you’ve heard about our stringent underwriting processes and overarching commitment to security. However, it’s always great to meet borrowers that share our values, and in turn, investors who believe in funding these socially responsible projects.
If you’ve got plans to make a positive difference to your area and need short-term finance to get started, speak to our sales team today to find out why our award-winning bridging loans could be the perfect solution.
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