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Mortgage costs soar for landlords, with worse to come - warning

Landlords have been hit with steep rises in the cost of buy to let fixed rate mortgages even before the Bank of England’s most recent base rate hike last week.

Data from online BTL mortgage broker Property Master shows that repayments on a typical two-year fixed rate mortgage for £160,000 with a Loan to Value of 60 per cent has increased by £103 since January of this year - with last week’s rise still to take effect.

Property Master chief executive Angus Stewart says: “We have seen the relentless climb in the cost of buy to let mortgages continue and that was even before the Bank of England increased the base rate for the fourth time in a row.  


“The current turbulence in the money markets is also making it more difficult for some lenders to raise funds so there is a fear that as well as higher mortgage costs landlords may also face reduced choice.  

“We are recommending to our clients that if they need to remortgage or are planning a new purchase, they should bear in mind mortgage rates are changing and products are being withdrawn on a more or less daily basis.”

He says that although superficially BTL mortgage costs look low by historical standards, the current volatility comes at a bad time. 

“Increased taxes and regulation have already chipped away in recent years on the returns landlords can hope to make.  Now increased borrowing costs are making margins slimmer still exacerbated by the government removing mortgage interest relief which had less impact when the base rate was lower” he adds.

“With accommodation in short supply and rents on the rise it will be worrying to see landlords deciding that the private rented sector is no longer for them.”



According to Property Master the cheapest typical buy to let mortgage is for a two-year fixed rate mortgage, for £160,000 with a Loan To Value of 60 per cent, moved up from 2.36 to 2.46 per cent. That’s an increase in monthly cost from £351 to £365 or £14, once fees are included.  

The increase was slightly less for the more popular five-year fixed rate mortgages.  

A typical five-year fixed rate buy-to-let mortgage with an LTV of 60 per cent again for £160,000 increased from 2.48  to 2.58 per cent, an increase in monthly cost from £346 to £359 or £13 per month more once fees are included.

The Property Master mortgage tracker, which is the basis for this information, follows some 30 lenders who constitute around 75 per cent of total buy to let mortgage lending. 

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    All fixed with about 3 years to go on cap and repayment…. Just in time for EPC changes when I will then sell :)

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    The real time bomb here is section 24. The higher the interest rate the greater the pain! There will be a lot of landlords out there who have enjoyed good times with low interest rates who have a very rude awakening coming there way.

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    British industry was trashed by Thatcher, who then looted state owned industries. The conservatives and Blair, have a track record of looting. PRS is just a nice big plum to be looted.

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    I agree with you Mario, We are very poorly represented . The constant and sustained attacks on Private Landlords all of which go unchallenged . The latest policy is for us to donate the properties we have saved up and paid for to the tenant for life. Which is going to be unchallenged as every other attack is unchallenged.


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