Buy-to-Let Interest Rates Tumble

It has certainly been a challenging environment for private landlords and investors in recent years.  The Government has increased stamp duty with its ‘3% surcharge’ on second homes and investments and imposed tightening restrictions on mortgage interest relief for landlords.  A ‘war on landlords’ indeed.

The number of new buy-to-let properties being purchased has fallen sharply as a result, with purchases by landlords falling to the lowest level since 2010.  Mortgage lending has followed suit with the latest figures from UK Finance showing the amount of money lent for buy-to-let properties fell 22% in May compared to a year ago.

However, lenders have responded by making buy-to-let mortgages cheaper and more attractive to borrowers.  The average 5 year fixed rate has fallen from 4.84% in 2013 to just 3.4% today.

The news gets even better when you look at some of the specific deals which are out there at the moment.  Skipton Building Society has a five year fixed rate deal at 2.05% for purchases and re-mortgages, subject to a 40% deposit requirement.  If you are after a shorter term deal, TSB offers 1.39% fixed for two years and Sainsbury’s bank has a similar 1.4% offer.

With interest rates on savings accounts still at derisory levels, property retains it’s ‘bricks and mortar’ appeal as an unrivalled investment class and is still yielding 5% + for the careful investor.  So don’t hang up your interest in adding to your portfolio just yet.  If you are considering becoming a first time landlord, the lenders have never been more pleased to see you.

Need help with a mortgage?  We can fix that – purchases and re-mortgages alike.  Just go to the Mortgage section of our website and get started!  Everything is arranged over the telephone with no need to take time off work or go to an inconvenient appointment.