Fixed rate buy-to-let mortgage costs look set to rise in the near term, according to Property Master.
Property Master’s May 2019 Mortgage Tracker shows the cost of five-year fixed rate buy-to-let mortgage offers for 50% of the value of a property were unchanged between April and May of this year, while cost of a five-year fixed rate buy-to-let mortgage offers for 65% of the value of a property increased month-on-month by just £2 per month.
The tracker also reveals that five-year fixed rates buy-to-let mortgage offers for 75% of the value of a property fell by £2 per month. A similar picture emerged for two-year fixed rate buy-to-let mortgage offers with the cost remaining the same or going down by £1 or £2 per month.
But the online mortgage broker believes that recent stability could be about to change.
The company points to last week’s Bank of England Inflation Report which signalled interest rates would rise quicker than expected on the back of growth in wages, falling unemployment and stronger GDP.
Angus Stewart, Property Master’s chief executive, commented: “We have been tracking the cost of buy-to-let fixed rate mortgages for almost 18 months now so have a large database. There have only been two movements in base rate over that period the last one of which was in August 2018, so we have seen a lengthy period of stability.
“But the Governor of the Bank of England signalled clearly last week that we should prepare for this stability to end much quicker than was expected on the back of positive news around wages, unemployment and stronger GDP.”
He added: “Stable base rates and increased competition in the lending market has helped to keep rates down in the buy-to-let market but last week’s news means it really is time for landlords to start re-thinking their finances.”