There has been an ‘unprecedented’ drop in the cost of fixed rate buy-to-let mortgages, according to the latest research from Property Master.
The online mortgage broker’s July 2019 Mortgage Tracker shows that the biggest fall in monthly cost was for five-year fixed rate buy-to-let mortgage products that offer 75% loan-to-value (LTV).
The monthly cost of this type of mortgage, calculated on deals available on July 1, 2019, fell by £36 per month between June and July, five-year fixed rates for 65% of the value of a property fell month-on-month by £6, while five-year fixed rate buy-to-let mortgage offers for 75% of the value of a property dropped by just £3 per month.
Two-year fixed rate buy-to-let mortgages for 50% and 65% of the value of a property fell by £5 each. Two-year fixed rate buy-to-let mortgages for 75% of the value of a property fell by £8 per month.
The Property Master Mortgage Tracker, which follows a range of buy-to-let mortgages for an interest-only loan of £150,000, monitors deals from 18 of some of the biggest lenders in the buy-to-let market including Barclays, BM Solutions, RBS, The Mortgage Works, Godiva and Precise.
Angus Stewart, Property Master’s chief executive, commented: “We have been tracking buy-to-let mortgage interest rates in this way for 18 months and we have never seen before a fall across the board in this way. It is quite unprecedented.
“Last month we were seeing a drift upwards in the cost of buy-to-let fixed rate mortgages but it may be that the market is now expecting rates generally to fall rather than rise.
“It is likely that lower rates are also being fuelled by the continuing increase in the number of buy-to-let mortgage products. Whilst it is true some lenders have exited the market others are boosting their range and competing hard for new business.
“As landlords continue to be pressed on all sides by rising regulatory cost such as the new Tenant Fees Act and falling tax reliefs today’s news of a lowering of mortgage costs will be very much welcomed.”