Rising interest rates a major concern for property investors in 2023

Asking help from bank lenders will be challenging this year.

The increase in interest rates is seen to be a major concern for investors as they review their options in 2023, Savills said in its report.

In the short term, finance from traditional bank lenders is projected to be challenging as they will need to evaluate risk, which will provide for bank lenders who are able to fill the gap with enhanced returns.

To curb the potential of accrued borrowing, the government imposed cooling measures such as the TSDR framework which is applied to private and public properties.

The TDSR for private properties is set at 60%, meaning that borrowers can only take on a mortgage that does not exceed 60% of their gross monthly income.

The government also has a Loan-to-Value (LTV) framework in place, which limits the amount of loan that a borrower can take on based on the value of the property. The LTV limit for a first-time borrower is set at 80% and subsequent borrowers at 75%.