The year 2022 is expected to be another successful year for buy to let mortgages as tens of thousands of fixed-rate mortgages are due for renewal. Our mortgage partner, Hamilton Fraser Total Landlord Mortgages, explains.

Lenders are rubbing their hands with glee as fixed-rate terms for mortgages written between December 2016 and January 2018 will expire this year and landlords start hunting for a new rate. The mortgage market is expected to become even more competitive as landlords try to find new deals to keep their repayments low whilst the Bank of England increase interest rates to fend off rising inflation.

The Bank of England increased the official interest rate to 2.5 per cent last month (from 2.35 per cent). This is the highest rate since March 2020 when the rate plunged from 0.75 per cent down to just 0.1 per cent.

The hike seems to have had little effect on buy to let mortgages, with the average deal floating around a 1.68 per cent interest rate mark according to figures from mortgage monitor, Property Masters. However, with inflation expected to keep rising in the short term, lenders anticipate that mortgage rates will float up with them.

Call Total Landlord Mortgages today on 0333 224 8918 or request a call back to speak to one of our fully regulated advisors and secure the best deal.

Buy to let by numbers: January 2022

A snapshot of the buy to let mortgage market this week shows:

  • 1,976 mortgages available
  • 100 high loan-to-rate deals at 80 per cent loan-to-value
  • 688 loans at 75 per cent loan-to-value
  • 322 mortgages at 60 per cent loan-to-value

Interest rates vary, mainly depending on the loan-to-value borrowed, but how does this compare to 2021?

Buy to let mortgageAverage interest rate
 Jan 2021Jan 2022Comparison
2-year fix – All LTVs2.89%2.92%+0.03%
2-year fix – 75% LTV2.97%2.99%+0.02%
2-year fix – 60% LTV2.53%2.55%+0.02%
5-year fix – all LTVs3.27%3.29%+0.02%
5-year fix – 80% LTV4.23%4.23%
5-year fix – 75% LTV3.43%3.45%+0.02%
5-year fix – 60% LTV2.81%2.84%+0.03%
Source: Moneyfacts   

Interestingly, some lenders have already tweaked their products since the interest rate hike, for example:

  • Paragon has cut rates
  • Metro Bank has increased maximum loan amounts
  • Accord have scrapped the minimum income levels

To take advantage of the best offers at the moment, call Total Landlord Mortgages today on 0333 224 8918 or request a call back here.

Pandemic brings mixed fortunes

The pandemic has brought mixed fortunes for landlords enjoying higher rents but hit by the rising joblessness among tenants.

The loss of income has resulted in around 840,000 tenants falling into rent arrears, with one in five owing £1,000 or more, says the National Residential Landlords Association.

At the same time London prestige property consultants, Hampton International, report buy to let rents were up an average of 4.1 per cent across the UK to £1,035 a month, an increase of £41 a month.

The firm also revealed the number of tenants seeking to rent broke through 2019 levels for the first time since the start of the pandemic.

Looking at the wider property market, the number of homes for sale is 43 per cent below the five-year rolling average, while tenant demand is 55 per cent higher. Each letting agent branch has 82 tenants signed up and chasing a new home, according to data from trade body the Association of Residential Letting Agents (ARLA) released in November 2021.

This number is highest in the East Midlands (134 tenants) and lowest in Wales (26 tenants).

Call Total Landlord Mortgages today on 0333 224 8918 or request a call back here.

What to expect in 2022

Total Landlord Mortgages is upbeat about the year to come.

Dan Lee

“This year, we expect to see more landlords assessing their portfolios with the fear of further interest rate rises ahead or the increase in inflation. The five-year fixed-rate mortgage is still incredibly attractive, and this may trigger more landlords to lock in low rates now whilst they are available,” said Dan Lee, principal at Total Landlord Mortgages (pictured).

“We also expect additional products linked to greener properties, such as demanding an Energy Performance Certificate (EPC) ranking of A-C, so reviewing your current mortgage and raising finance to fund any changes needed may be a good option.”

Lastly, mortgage rates and inflation are not the only things going up in the property world. The good news is many landlords can borrow more as their equity has increased in line with house prices over the past year. The latest figures from Halifax show the average house value in the UK reached a new high in December 2021 of £276,091.

Call Total Landlord Mortgages today on 0333 224 8918 or request a call back here

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