The average two-year tracker buy-to-let mortgage rate has increased by 0.2% over the past month, following the Bank of England base rate hike, according to fresh data released by Moneyfacts.
The average two-year tracker for a landlord has risen from a record low of 2.23% in November to 2.43%, which is the highest monthly increase ever seen by Moneyfacts.
Fixed rates have also increased, albeit marginally, with a typical two-year deal now available at 2.93%, from 2.89% in November, the research has revealed.
|Average Buy-to-let Rates||Dec 2016||Jun 2017||Nov 2017||Today|
|Two Year Fixed||3.01%||2.94%||2.89%||2.93%|
|Two Year Tracker||2.40%||2.32%||2.23%||2.43%|
According to Nelson, the criteria changes for portfolio landlords, together with increasing SWAP rates in the run-up to the base rate announcement and then the base rate rise itself, “has proved a lethal cocktail for fixed rate BTL mortgages, with all this pressure leaving providers little choice but to review their range”.
The portfolio changes could already be starting to eat into the returns of landlords, and rising fixed and variable buy-to-let mortgage rates will only heighten the issue, “making many consider whether BTL is still the right option for them,” Nelson added. “With rates on the rise, it is important that BTL landlords weigh up their options carefully.”
However, given that savings rates remain low, Nelson does still believe that property “is still seen as a good option by many” and the lure of a higher return will continue to see many potential landlords “wanting to dip their toe into the buy-to-let waters”.