Buy-to-let rates fall
The cost of a typical 5-year fixed rate buy-to-let mortgage has fallen since the start of the year despite speculation that the Bank of England will soon increase base rates again.
This was found by a Mortgage Tracker launched today by Property Master, a digital start up that uses algorithms to match the requirements of individual private landlords against the entire buy-to-let mortgage market of some 2,000 plus products.
It revealed that average 2-year fixed rates based on 65% of the value of the property and 75% of the value of the property also declined from January to May 1st of this year. Only 2-year fixed rate mortgages for 50% of the value of a buy-to-let property increased over the five-month period and then by 0.42%.
Angus Stewart, chief executive of Property Master, said: “This is quite a significant increase and perhaps reflects that there are fewer lenders discriminating at the 50% LTV level. Lenders are clearly taking margin here and giving back on other LTV levels.”
Savings on a 5-year fixed rate buy-to-let interest only mortgage on a typical property worth £180,000 ranged from £5 to £15 per month and on some 2-year fixed rates from £10 to £15 a month.
Stewart added: “Our findings show that there are some very good deals out there for landlords despite worries over any future increase in base rates.
“The Monetary Policy Committee meets again this coming Thursday (May 10th) so we will see what happens then but there may be other factors operating in the buy-to-let market which explains the decline in costs that we have seen.
“Our findings come on the back of recent research revealing that the number of buy-to-let products currently on the market has reached a record high, so it could be that we are seeing landlords benefiting from unprecedented competition amongst lenders for their business. This is very good news indeed.”