Posts with tag: buy-to-let mortgage products

Buy-to-let rates slide to record lows

Published On: February 9, 2017 at 11:52 am


Categories: Finance News

Tags: ,,,,

The most recent data released by Mortgages for Business has revealed that average buy-to-let rates for two and three year products have dropped to their lowest levels on record.

Rates for these products stand at 2.92% and 3.76% respectively.

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However the report also shows that five-year fixed rates rose for the second month in succession, standing at an average of 3.77%, This is more than the average price of a three-year fixed rate for the first time since January 2015.

In addition, the Index found that January was a good month for short-term tracker products. Two-year buy-to-let tracker rates stayed at an average of just 2.81%-unchanged from December.

Buy-to-let rates slide to record lows

Buy-to-let rates slide to record lows

David Whittaker, CEO of Mortgages for Business, observed: ‘Longer term swaps in particular have risen in recent months, so it’s no surprise that pricing for five-year fixed rates have started to creep up. However, when looking at the bigger picture, these rates are still, on average, less than 1% more than their shorter term counterparts. As such, we continue to recommend them to customers as they not only provide a longer period of security against rate rises in an uncertain market, they can also save landlords the time and money it costs in remortgaging more often.’ [1]

‘At the very least, landlords should consider having some properties mortgaged on longer term fixes to spread risk. The fact that these rates are beginning to rise now should prompt landlords to take action sooner rather than later,’ Mr Whittaker added.[1]





Buy-to-Let Landlords Owe Equivalent of Hong Kong Economy in Mortgages

British buy-to-let landlords owe over £200 billion in mortgage repayments, equivalent to the size of the Hong Kong economy, says the Council of Mortgage Lenders (CML).

The CML’s report states that changes, such as Chancellor George Osborne’s proposal to cut landlord tax relief and an expected interest rate rise, are currently causing “considerable uncertainty” in the sector.

Buy-to-Let Landlords Owe Equivalent of Hong Kong Economy in Mortgages

Buy-to-Let Landlords Owe Equivalent of Hong Kong Economy in Mortgages

The CML has urged ministers to consider the effect of these plans on the wider economy and indicates that rent rises are likely, as landlords attempt to recover lost income.

The report says: “The Chancellor’s announcement of tax changes affecting buy-to-let landlords, which are being introduced over a five-year implementation period, has created another source of uncertainty for landlords, tenants and lenders.

“The measures are likely to deter some landlords from expanding their portfolios, and may encourage others to reduce their property holdings. They could also lead landlords to seek to increase rents to cover some of their additional tax liabilities. Overall, the extent to which the measures may discourage future growth of buy-to-let and the private rented sector is unclear.”

It continues: “Over the last 15 years or so, buy-to-let has made an important contribution to the expansion of the private rented sector, helping to reverse many decades of decline.

“Currently, however, there is considerable uncertainty over the impact of a series of regulatory and fiscal proposals on both buy-to-let and the private rented sector.

“We have, however, already urged the Treasury to take into account the effect of tax changes in finalising its proposals to reform macro-prudential powers.”1 

The CML report also reveals that the private rental sector has doubled in size over the last 12 years, following decades of decline.

Of all buy-to-let mortgages granted in the UK, 24% are for properties in London, compared to just 13% of all owner-occupied mortgages being issued in the capital.

The figures show that landlords favour certain types of properties, with 36% of loans for flats and 34% for terraced houses. This trend is even more marked in London, with flats accounting for almost two-thirds of buy-to-let purchases.

The CML also found that the sector witnessed a stronger recovery than the wider market following the financial crisis, with buy-to-let lending reaching £27 billion last year, after a low of £9 billion in 2009.

At present, there are around 1,100 buy-to-let mortgage products on the market, the highest number since April 2008.



New Buy-to-Let Mortgage Deals Announced

Published On: September 11, 2015 at 11:30 am


Categories: Landlord News

Tags: ,,

This week, mortgage lenders have announced a number of new buy-to-let mortgage deals, which they hope will widen the appeal to potential investors.

In the past, NatWest’s buy-to-let mortgages targeted non-professional landlords – those that earn less than 30% of their income from their properties.

However, from today, these restrictions have been lifted, meaning professional landlords can also apply.

Additionally, the bank has removed its maximum loan limit of £500,000.

It says that the new criteria will only apply to new applications, submitted from today onwards.

New Buy-to-Let Mortgage Deals Announced

New Buy-to-Let Mortgage Deals Announced

Acting Head of Sales at NatWest Intermediary Solutions, Paul Kane, explains the decision: “Over the last 18 months we have made improvements to our buy-to-let offering, to grow out presence in this sector.

“Having enjoyed great success and increased our lending, we are now confident that we can significantly grow our buy-to-let business into areas of the market that previously we have not operated in.

“The introduction of our new criteria means that we can now welcome applications from professional landlords, which is something that many brokers have been crying out for.

“The buy-to-let mortgage market has grown significantly over the last six years from accounting for 5% of all UK gross lending in 2009 to 15% in 2015.

“It is the fastest growing segment of the mortgage market in the UK. The changes we are introducing, combined with the recent rate cuts we made across our portfolio, mean we have a really strong proposition for mortgage intermediaries who are serious about this market.”1

The HSBC has announced that it is making its buy-to-let mortgages available to non-HSBC customers for the first time, with applications being assessed on a rental income basis only.

Also, the bank will offer new 60% and 70% loan-to-value (LTV) deals.

Tracie Pearce, Head of Mortgages at HSBC, says the availability of buy-to-let products is now at its highest peak since 2008.

She adds: “High rents and low interest rates mean customers are increasingly seeing buy-to-let as an attractive investment opportunity. The policy and pricing changes we have made will make our range available to even more people.”1

Aldermore Bank now allows borrowers to buy a new home for themselves, while keeping their existing home as a but-to-let property.

Furthermore, the bank has made changes to its residential mortgage and standard buy-to-let mortgage range, including extending family gifted deposits to cover additional family members, foster parents and legal guardians.

Group Managing Director for Mortgages at Aldermore, Charles Haresnape, says: “These changes provide greater flexibility for borrowers and are part of our commitment to continually improve our products and services for all mortgage customers.

“Extending our let-to-buy mortgage offering is a key milestone in Aldermore’s development. It allows homeowners that wish to move, but who do not wish to sell their house or are unable to, to purchase another property.”1