The chief executive of a specialist buy to let mortgage broker is warning that mortgages for landlords are likely to become more expensive in the near term.
Andrew Turner, the head of Commercial Trust Limited, says that despite two Bank of England base rate rises in the past 12 months, there remains some historically low rates for both tracker and fixed rate buy to let mortgage products.
He says this is because, as yet at least, the increased costs of lending have not been reflected across the whole range of buy to let mortgages.
“This has been the case for some time and is reflective of a hugely competitive market place where lenders are trying to outdo one another with enticing mortgage deals, encompassing low rates, low fees, or incentives such as cash-back or free valuations” says Turner.
He says that with over 2,000 mortgage products in the buy to let marketplace, investors have a vast choice but he warns: “Rates are low now, but this may about to change.”
“The bumpy road of Brexit may see the base rate brought down slightly, once things settle, but I think it is unlikely and in any event, there is not too much scope for reduction. My view is that the overall picture for the next decade is a gradual upward trend in rates” according to Turner.
“In November [UK Finance] statistics indicated that buy to let remortgaging activity in 2018 would exceed its forecasts by approximately £3 billion, while a similar figure would represent a shortfall in its forecasts for buy to let purchase business in the year. It can be no coincidence that there has been a surge in landlord activity around buy to let remortgages, with such uncertainty affecting their businesses” he adds.
Turner says any current or would-be buy to let investor concerned about future possible rises should consider “fixing now at a competitive low rate and for a period suited to you” to offer “a great deal of security through turbulent times.”