Mortgage lenders have been reducing their lending rates, providing some cheap mortgage deals to keep landlords in the market.
Over the last couple of years, landlords found themselves operation in a tougher landscape, having to adjust to stricter lending criteria, the phasing out of tax relief on mortgage interest payments over a four-year period to April 2020, and increasing letting regulations.
Last week the Halifax Building Society and Nationwide both cut their buy-to-let rates, on some deals by 0.45%. Barclays joined in, reducing some deals from 1.59% to 1.55% on a two-year fixed-rate mortgage with a 40% deposit, and a reduction from 1.88% five-year fix to 1.83% and a minimum 25% deposit.
Broker only platform, Mortgage Brain, informed the Sunday Times that the average 40% deposit tracker mortgage is 3% cheaper than it was three months ago, and a 30% deposit tracker deal is 2% cheaper than in March.
This equates to, for example, a landlord taking out a £150,000 mortgage saving £234 per year with a 40% deposit, and £144 per year with a 30% deposit.
Aaron Strutt of broker Trinity Financial told the Sunday Times:
“The buy-to-let market has taken a real hit – there simply is not as much interest from landlords as lenders have been used to over the years,”
“Lenders have been targeting the buy-to-let re-mortgage market to drum up some business and, incredibly, they keep cutting rates to tempt landlords in.”
There’s currently a record number (1,405 first-time buy-to-let mortgages) of deals available to new landlords, indicating that the new rules designed to tighten lending don’t appear to have shaken lenders’ confidence with new landlords.