Some BTL mortgage rates have doubled this year – as rates rise ‘inexorably’

Some BTL mortgage rates have doubled this year – as rates rise ‘inexorably’

11:11 AM, 12th August 2022, About a month ago 2

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The average buy-to-let mortgage rates for some typical two-year fixed rate deals favoured by landlords have doubled since the start of the year, it has been revealed.

According to Property Master’s Mortgage Tracker, the average rate for a typical £160,000 BTL mortgage fixed for two years for a Loan to Value (LTV) of 60% had more than doubled since the start of this year – from 1.69% in January to 3.43% in August.

This took the monthly cost, including fees, from £262 to £494, an increase of £232.

The online buy-to-let mortgage broker also found that the same mortgage fixed for five years had also increased dramatically from 1.94% in January to 3.5% in August – an increase in monthly costs, including fees, from £273 in January to £481 in August, up £208.

‘Cost of buy-to-let mortgages continues to rise inexorably’

Angus Stewart, Property Master’s chief executive, said: “The cost of buy-to-let mortgages continues to rise inexorably.

“Obviously, much of this reflects the Bank of England’s decision to hike interest rates for the sixth time earlier this month but there are other factors at play too.

“We are seeing reduced competition in the buy-to-let mortgage market caused by a combination of factors with some lenders using higher rates to manage customer demand, whilst others are taking the opportunity to widen their margins.”

He added: “We have said for some years that increased regulation and higher costs were leading to the professionalisation of the private rented sector.

“In reality, this will mean fewer but larger landlords.

‘Unaffordable rises in mortgage costs’

“For many of the smaller players in this market, unaffordable rises in mortgage costs will undoubtedly lead them to conclude buy-to-let no longer works for them.

“Indeed, the latest figures from HMRC show a dramatic increase in takings from Capital Gains Tax suggesting many landlords are deciding this is the moment to sell-up.”

The Property Master Buy-to-let Mortgage Tracker follows 30 lenders who constitute around 75% of total BTL mortgage lending.

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Comments

Badger

17:29 PM, 15th August 2022, About a month ago

Is there a connection between Property Master (a broker in its own right) and Brooklands please?

Old Mrs Landlord

18:34 PM, 16th August 2022, About a month ago

Angus Stewart is so right, the changes are "professionalising" the PRS. Our mortgages are interest-only on Tracker rates and have more than doubled this year. The result of this plus the cost of complying with increased regulation and restrictions is all tenants except those on LHA rates have had a rent increase this year. Tenants will be "professionalised" out of their homes if the pressures on the PRS continue unabated.

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