Buy to Let Mortgages:
Latest research out today (Thursday, March 14) from online mortgage broker, Property Master, the digital start up that uses algorithms to match the requirements of individual private landlords against the entire buy-to-let mortgage market, shows the cost of two out of three categories of five year fixed rate buy-to-let mortgages had showed a sharp spike in cost compared to the previous month (February.) Average product fees were also up markedly.
Property Master’s March 2019 Mortgage Tracker shows the monthly cost of five-year fixed rate offers for 50% of the value of a property jumped by £25 between February and March, the largest month on month increase the Tracker has ever recorded. Average product fees for this type of mortgage also leapt by £287, from £1,212 to £1,499. The cost of a five-year fixed rate for 65% of the value of a property increased from £343 to £350, a more modest rise but again more than has been seen before. Average product fees for the 65% were also up by £30, from £918 to £948.
The Property Master Mortgage Tracker follows a range of buy-to-let mortgages for an interest only loan of £150,000. Deals from 18 of some of the biggest lenders in the buy-to-let market including Barclays, BM Solutions, RBS, The Mortgage Works, Godiva and Precise (full list below) were tracked. Figures for this month’s Mortgage Tracker were calculated on deals available on March 1, 2019.
Angus Stewart, Property Master’s Chief Executive, said: “Over time five-year fixed rates have emerged as the product of choice for many buy-to-let landlords. These products tend to be easier to get through the lenders’ affordability assessments. They have also offered good value from increased competition amongst lenders and a more benign interest rate environment has helped to keep their cost down. However, what we have seen this month from our Mortgage Tracker is a worrying development.”
Mr Stewart continued: “Added to this we have the continued fog around Brexit and possibly higher interest rates were the UK to crash out of Europe without a deal with all the turbulence that would bring. We have another Monetary Policy Committee meeting next week but given that it will be only days before March 29th when the UK is due to leave the European Union we are unlikely to get any more clarity around interest rates at that time.”
Property Master was launched almost two years ago and aims to shake up the buy-to-let mortgage market currently served by around 12,000 mortgage brokers. It has already attracted financial backing from a broad range of private investors including a minority stake being taken by LSL Property Services, whose estate and letting agency brands include Your Move and Reeds Rains.
Property Master has automated what was a manual, complex process to provide landlords with a free easy to use mortgage search tool which provides a mortgage quote that is pre-screened against each lender’s specific and changing criteria.
About Property Master
Property Master launched almost two years ago and is the UK’s first and only digital mortgage brokerage service for UK buy-to-let landlords. Its innovative approach enables private landlords to take control of their financing online for the first time by matching their requirements on Property Master’s unique and complete database of mortgage information and lending criteria. Founded by a group of highly experienced financial services professionals, the company is directly authorised and regulated by the Financial Conduct Authority (FCA).