by Mark Johnston
Buy to Let Mortgage Rates.
Statistics recently released have revealed that last year £16.4 billion was lent to buy to let investors. This figure was 19 per cent higher than the £13.8 billion advanced in 2011.
These figures do show that there is still continued growth within this particular sector.
A knock on effect of the mortgage drought that followed the banking crisis in 2008 was that fewer people were able to obtain a mortgage and therefore many had instead had to turn to renting.
This meant however that there was a huge increase in tenant demand and this in turn pushed rents higher making the buy to let sector more attractive to investors and lenders alike.
Lenders have become more inclined to extend money in to this sector of late as the asset taken against a loan also pays an income and landlords tend to have bigger deposits to put down. They have also been encouraged by buy to let repossessions and arrears being lower than was initially expected.
Buy to let mortgage lending is growing at 20 per cent a year. 2012 was a good year for the buy to let mortgage market with more lenders and products available for landlords to choose from.
Despite the funding for lending scheme producing mortgage rate falls it seems that buy to let mortgages have remained high. Therefore the National Landlords Association (NLA), a trade body for professional landlords, has asked lenders to improve their deals for the sector.
However, it does appear that some lenders have listened as buy to let fixed rate mortgages have now tumbled to levels not seen since 2007.
Data from comparison website, Moneyfacts, shows that just five months ago the average fixed rate mortgage deal stood at 5.09 per cent and the rate has come down to at least 4.69 per cent.
Landlord Centre, the online buy to let mortgage specialist, is offering two new three year fixed rate buy to let mortgages with Skipton building society. The deals are a 3.79 per cent fixed rate up to 65 per cent loan to value (LTV) and a 4.19 per cent fixed rate up to 75 per cent loan to value (LTV). Both products have a flat completion fee of £995.
Andy Young, chief executive at Landlord Centre, said “these two new buy to let exclusives with Skipton are very attractively priced and are 0.2 per cent lower than previously”.
Coventry building society is offering a shorter period fix of two years at a rate of 3.29 per cent with a 65 per cent loan to value (LTV). However, the fee is a hefty £1,999.
Rachel Springall, an expert at moneyfacts.co.uk, suggests that the best two year fix comes from The Mortgage Works, which is Nationwide’s landlord lending arm, at 3.19 per cent with a 75 per cent loan to value (LTV) and this comes with a 3.5 per cent fee.
In conclusion as the buy to let market thrives, there may well be a few investors considering remortgaging to a better deal.
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