Bank of England

How buy-to-let mortgages have been affected by base rate rise

The announcement of the Bank of England’s base rate rise on 2 November was expected to have a significant effect on buy-to-let mortgages.

As lenders reviewed their products and landlords analysed the impact on their existing property investments and future plans, mortgage experts awaited the fallout following a year of regulation changes already affecting the BTL market.

According to Moneyfacts, the average two-year tracker has risen by 0.20% since the announcement. In fact, within two weeks Barclays, Santander, HSBC and Halifax had all increased their variable rate products by 0.25%, passing the full cost of the rise onto consumers.

Faced with increased monthly repayments across several properties – a quarter percent rise on a £200,000 loan means paying an extra £40 per month – many landlords could start reviewing their existing buy-to-let deals and seeking a better deal.

Not all lenders passed on the full rate rise

Although most of the current offers are slightly more expensive, there are still good value deals to be found. Interestingly, both the Royal Bank of Scotland and Natwest reduced their rate on two-year fixed rates by 0.15% and on five-year fixes by 0.2%.

Mark Bullard, head of sales at NatWest, said: “Having declared our intent to continue to fully support the buy-to-let sector under the new PRA requirements, it’s timely that we are able to announce such significant cuts to both our rates and product fees on so many of our buy-to-let deals.”

With savings rates still low, buy-to-let consistently outperforms other investment types. It seems that the base rate increase is unlikely to deter the serious investors from seeking out the best buy-to-let deals.

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

STAY AHEAD OF THE MARKET

Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment

FIRST FOR NEWS AND KNOWLEDGE.

Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:

 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

 

+852 6699 9008

Open from 9am-6pm HKT