BTL Lenders Continue to Slash Rates
Published ¤ 12/04/2016 15:03:26
Buy-to-let lenders continue to slash their mortgage rates helping landlords offset Chancellor George Osborne's tax crackdown on property investing.
The average two-year fixed rate has fallen from 3.59% one year ago to 3.22% today, a drop of more than 10%, according to new figures from Moneyfacts.co.uk.
This compares to 5.21% five years ago, a fall of 38%, figures show.
The average five-year fixed rate has fallen from 6.24% to 4% since 2011, a similar-sized drop of 37%.
Charlotte Nelson, finance expert at Moneyfacts, said a rise in mortgage rates would not have been unexpected following April's stamp duty changes and recently-announced affordability tests, yet the opposite has occurred.
"The buy-to-let market has faced intense pressure recently, but despite this, fixed rates have continued to fall. For example, the average two-year fixed rate has fallen by 0.71% in just two years, while the average five-year fix has dropped by an equally significant 0.76% over the same period.
"While the new rules and stamp duty changes could potentially take the shine off buy-to-let, property is often seen as a safe bet, and with rental properties in demand and rent high, it remains an attractive proposition."
Nelson said that buy-to-let continues to attract older savers looking for an alternative to rock bottom savings rates, but they must do their sums carefully.
"Borrowers should remember that they will now be facing tighter lending rules, including stricter affordability checks, so it is even more important to seek financial advice to see if buy-to-let really is the right option."
If you are looking to buy a new investment property, call PKS to discuss your options, on 01256 701205.
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