x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

Landlords opt for fixed-rate BTL deals

Some 93% of landlords financing buy-to-let property chose a fixed rate mortgage in the second quarter of the year, fresh figures show.

Five-year fixed rates were the most popular choice for landlords dealing with Mortgages for Business, with 69% of landlords choosing this option, according to latest buy-to-let mortgage index published by Mortgages for Business.

David Whittaker, CEO of Mortgages for Business, said: “We’ve been recommending five-year fixed rates for a long time. At the moment there is very little difference in pricing between fixed and variable rate products.”

The data also shows that a growing number of lenders are offering products free from arrangement fees.

In Q2, 20% of all products had no fee attached, up from 14% in Q3 2017. Other incentives were also on the increase, including cash back, free valuations and free legals for landlords remortgaging property.

The average flat arrangement fee, however, increased slightly in the quarter to an average of £1,389. At less than £1,500 this still represents reasonable value.

Overall, pricing remained fairly flat in Q2 despite an increase in swap rates, suggesting that lenders continue to absorb costs in order to remain competitive.

Whittaker continued: “In today’s uncertain economic climate, particularly the road crash Brexit negotiations, fixing makes a lot of sense, especially as the average price is just 3.52%. Why wouldn’t landlords make them a part of their business strategy?”

The BTL index also found that the number of lenders offering products to landlords borrowing via limited companies increased by three (The Mortgage Works, Kensington Mortgages and LendInvest) in Q2, while half of all buy-to-let lenders now offer mortgages to corporates.

Remortgaging continues to outstrip purchases, although there were still more buy-to-let purchase transactions by landlords using limited companies.

At 8.6% HMOs produced the highest gross annual yields.

Poll: Will the Bank of England hike interest rates in August?

PLACE YOUR VOTE BELOW

icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit
sign up