Previously, nearly all buy-to-let mortgages charged a minimum 1% arrangement fee, but fresh data from specialist buy-to-let broker Mortgages for Business shows that one in five buy-to-let mortgages now carries no lender arrangement fee, compared to just one in ten – 11% - a year ago.
While the move by lenders to scrap mortgage fees would save landlords money in terms of upfront costs, it is worth pointing out that rates on fee-free deals are occasionally higher than on deals which charge a fee.
Separate data from Moneyfacts shows that buy-to-let investors now have plenty of choice when looking for a mortgage, with 2,022 buy-to-let products currently on the market, up 29.8% year-on-year.
The Prudential Regulation Authority (PRA) rules launched at the end of September 2017, which saw lenders having to apply stricter standards to those with four or more properties, could explain the boost to product numbers, according to Charlotte Nelson, finance expert at moneyfacts.co.uk.
She said: “The BTL market has seen quite a rollercoaster ride over the past year, including multiple changes that have required both landlords and providers to rethink their options.
“However, this hasn’t appeared to deter providers, marking an increase of 464 deals in just one year, which has seen the BTL market break yet another record and rise past the 2,000 mark for the first time on moneyfacts.co.uk’s records.”
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