Buy-to-let prices still tumbling
Good news for landlords as the latest data shows buy-to-let mortgages rates continue to tumble.
New data, from mortgage technology provider Mortgage Brain, indicates that the majority of mainstream buy-to-let mortgages have reduced in cost, some as recently as the last few months.
The cost of a two-year fixed buy-to-let purchase product, for both 60 percent and 70 percent loan to value is now 4 percent lower than it was in May 2017, which in real terms represents an annual saving of £342 for a 60 percent loan to value mortgage and £306 for a 70 percent loan to value mortgage.
Mark Lofthouse, chief executive of Mortgage Brain, said:
Despite the forthcoming changes to buy-to-let lending, the outlook for investors at the moment is extremely favourable with BTL mortgage costs coming down yet again.
In the meantime, UK Finance has released figures that indicate a fall in buy-to-let lending between this quarter and the last, with tax changes such as stamp duty and the reduction of tax relief on mortgage interest, attributed for this drop.
Andrew Turner, chief executive at Commercial Trust, commented:
These two sets of data make for interesting reading. Landlords have had a financial hammering from the government’s recent tax grabs, but the good news is that lenders are keen to respond and help them continue to achieve profitability.
"The latest news on falling rates and costs is terrific to hear and should serve to reassure landlords that buy-to-let remains a competitive means of investment.
"Clearly the major lenders are keen to attract buy to let business by offering a range of competitive rates and cost reductions, which offers a positive outlook for the future.
"At a time when we have low interest rates, there is a window of opportunity for buy-to-let landlords to switch or invest, depending on their circumstances.
"With lenders reducing rates there is an enormous amount of choice available to landlords at the moment. I encourage them to seize the day, as the second phase of PRA changes involves a potential increase in lending costs, which may filter down to landlord borrowers.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.