Low interest rates to benefit landlords for at least two years - Residential landlords with outstanding buy-to-let loans can expect to enjoy low interest rates in Britain for the next two years, according to a study conducted by the Centre for Economics and Business Research (CEBR). The organization believes that the Bank of England will keep the country’s key rate fixed at its current historic low of 0.5 percent until 2011. Even better news is the prediction that the rate will rise only gradually after this and will not reach 2 percent until 2014.

The much less positive news in CEBR’s set of predictions is that the pound is set to weaken even further and may very well fall below one euro in the coming months. Sterling will also continue to weaken against the US dollar, likely dropping to around $1.40. There may be a slight sliver lining for those looking to sell their buy-to-let properties under these conditions, as foreign investors will likely find the UK residential properties market more attractive than ever before, if the pound continues to drop in value.

There had been earlier predictions made by buy-to-let experts cautioning residential landlords to prepare for a base rate hike by the Bank of England and consequent difficulties for those that relied on low interests to weather the recession, as well as tenant arrears. But mortgage specialist Richard Morea told The Guardian that even if the base rate remains low, loan interests are unlikely to fall any further, especially as many clients with significant deposits have already been given reasonable rates.

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