According to Moneyfacts.co.uk, lenders are continuing to slash their buy-to-let mortgage rates in an attempt to lure in new business as tax changes continue to force landlords out of the market. Average rates in the buy-to-let sector have dropped significantly since 2015 – indicating how keen lenders are to get new business onto their books as demand falls.
Virgin Money has a five-year fixed-rate mortgage at 60 per cent loan-to-value at 2.13 per cent interest and a £1,995 product fee, while Royal Bank of Scotland has a five year fix at 60 per cent LTV with no fee at 2.30 per cent. On top of low rates, borrowers can take advantage of an increasing number of cashback incentives as lenders get creative to attract new business.
Darren Cook, finance expert at Moneyfacts.co.uk, said: ‘An incentive of cashback to assist landlords in covering the costs of a buy-to-let mortgage is becoming a more prominent feature of the buy-to-let market. ‘Especially considering last year’s upheaval in this sector, landlords will be looking for any way to cut costs and increase their margins. It seems that providers are obliging.’
The current number of deals with a cashback incentive stands at 444, which is nearly double the number of products that were available two years ago. Some 266 of these deals are available at the higher loan-to-value tiers of 70 per cent, 75 per cent and 80 per cent, which could make them particularly appealing to first-time landlords.
For longer term mortgages, Coventry has a 10-year fix at 2.85 per cent interest at 50 per cent loan-to-value with a £1,999 fee, while The Mortgage Works has a 10-year fix at 75 per cent LTV at 4.99 per cent with no fee.
Although the demand for new buy-to-let mortgages is falling, the demand for private rental properties in rising with 1 in 4 newly bought properties being rented out. Experts confirm that against the back drop of appalling returns from banks and building societies, investors are turning to residential property as a way on investing their income.
If you too are looking to invest your money in an investment property, you are probably expecting a decent yield through the rental income. From these low mortgage figures it would appear that there is still plenty of opportunity for getting onto the investment ladder and enjoying the returns of property investment be it from rental yield or capital growth. Indeed, the UK has a proven track record of returns, and no matter how easy it is to think that prices are unsustainable, the level of demand for housing in Britain far outweighs supply so it’s just a matter of statistics!
If you are considering a rental investment please get in touch with our experienced team on 01904 393989 and we would be very happy to talk you through the process.
