New research from Property Master has found that the cost of buy-to-let mortgages has fallen year on year.
Lenders are continuing their support for individual and limited company landlords in anticipation of a busy few months ahead.
According to Property Master, five-year fixed rate buy-to-let mortgages for 65% loan-to-value (LTV) saw costs fall the most. Borrowers now save £48 per month on a £150,000 mortgage compared to 12 months ago.
Two-year fixed rates fell more modestly. The cost of a typical mortgage for £150,000 for 75% of the value of the property was down £25 per month year-on-year. The cost of a 65% LTV product fell by £19 per month.
The falling costs of buy-to-let mortgages are likely to continue. Lenders are reviewing and refreshing their buy-to-let ranges to support landlords keen to remain in the market but conscious of their squeezed profit margins.
Landbay reduces minimum income
Landlords can now access Landbay’s buy-to-let ranges with a minimum income of £15,000. The minimum property value is £75,000 for standard properties and HMOs in qualifying areas.
The lender has also reduced the minimum loan amount by £20,000 to £30,000. Further to this, the maximum standard property loan has increased to £2 million for up to 75% LTV mortgages.
Plus, landlords looking for an 80% LTV can benefit from their standard five-year rate available from 3.89%.
Paul Brett, managing director of intermediaries at Landbay, said: “As part of our product refresh, we’re especially pleased with the changes to the 80% LTV products.”
“These changes are part of our strategy to extend our product offering to an even wider range of borrowers, helping our partners support more landlords across the country.”
Support for limited company landlords
The Nottingham for Intermediaries has unveiled a new buy-to-let offer to support landlords restructuring to limited companies. Two-year fixes are now available at 2.76% with a £999 fee and at 2.79% with a 0.50% fee at 75% LTV.
Nikki Warren-Dean, head of intermediary sales at The Nottingham, said: “Judging from the conversations we’ve been having with our broker network, many landlords are considering structuring their portfolios on a limited company basis, if they haven’t already.”
She added that it is important to offer competitively priced products to suit landlords’ needs.
TSB offers landlords mortgage security
Another lender that is offering a refreshed BTL range is TSB. It has introduced its first 10-year fixed rate buy-to-let mortgage products, giving landlords the option of long-term security. For up to 60% LTV, borrowers can get a rate starting from 2.44%. With a 60-75% LTV, landlords can borrow for 3.19% upwards with a range of fee options.
With interest rates currently very low, especially for buy-to-let landlords, some will want the added reassurance of a long-term rate.
TSB has also reduced its rates for three and five-year fixed rate BTL products by up to 0.25%.
Beverley Bradford, TSB’s head of intermediary mortgages, said: “These changes, as well as the introduction of our new 10-year fixed buy-to-let mortgages, should go some way to offering peace of mind to those looking to fix their monthly payments for any length of time that suit their lifestyle.”
Lenders anticipate a busy April
Angus Stewart, chief executive of Property Master, said the company expects a busy few months.
“This April it will be four years since significant changes were made to stamp duty. The decision by the then government to slap on a 3% surcharge on buy-to-let properties led to a mini-boom as landlords rushed to buy properties to beat the deadline.”
“We suspect many of those landlords will be coming to the end of fixed-rate mortgages around now. They should be pleasantly surprised at what the market is prepared to offer them in terms of a good deal.”
