STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

MPL
Lenders try to bolster flagging buy to let market with record low rates

Independent comparison website Moneyfacts says mortgage lenders are slashing rates on products designed for landlords, in a bid to buoy up a market which may dip following the passing of the stamp duty surcharge deadline. 

Moneyfacts says the average two-year fixed rate buy to let mortgage now stands at 3.32 per cent - well down on 3.59 per cent 12 months ago and 4.03 per cent in April 2014. The average five-year fixed rate for landlords is currently 4.0 per cent compared to 4.37 per cent in April 2015 and 4.76 per cent two years ago. 

“While the new [tax] rules and stamp duty changes could potentially take the shine off BTL investment, property is often seen as a safe bet, and with rental properties in demand and rent high, buy to let remains an attractive proposition” says Charlotte Nelson, a Moneyfacts spokeswoman.

“A year on from pension freedoms, almost £3 billion has been paid out in cash lump sum withdrawals, so it’s highly likely that some of this money has been accessed with buy to let in mind” she says. 

Moneyfacts’ analysts say savings rates are so poor that many ‘pension freedom’ recipients are looking elsewhere to fund their retirement, so lenders have tried to capitalise on this new pool of cash by offering some of the best rates the buy to let sector has ever seen. 

In addition, providers also cut rates in the run-up to the stamp duty changes in order to attract those keen to buy before they were implemented, which has further aided the downward slide in rates.

“However, while the current pressures on the market are not yet causing rates to rise, borrowers should remember that they will now be facing tighter lending rules, including stricter affordability checks, so it is even more important for potential landlords to seek financial advice to see if buy to let really is the right option for them” explains Nelson.

imgcollapse
sign up