Buy-to-let mortgage rates hit new all-time low

Here, we look at how new government legislation has impacted buy-to-let landlords across the country.

One thing definitely safe to say about the last couple of years is that they have not been particularly kind to buy-to-let landlords. Specifically, overhauled legislation rolled out by the government has done little other than make it more complicated and expensive for buy-to-let landlords to both enter the industry in the first place and expand their portfolios.

All of which is precisely why any kind of good news for those working at any level in the industry comes as welcome, if all-too rare, relief.

Which is precisely what today brings, as there is growing evidence to suggest that the overall borrowing costs of buy-to-let mortgages have in fact dipped to all-time lows. Last week, a report published by Mortgages for Business suggested that the average interest rates for two and three-year fixed buy-to-let mortgage products had fallen to 2.92 per cent and 3.76 per cent respectively.

More is being offered

This week, a new report published seems to suggest exactly the same, stating that there has been an 18 per cent reduction in the average cost of an 80 per cent loan-to-value buy-to-let since the beginning of 2014.

They also state that costs have come down a further 11 per cent since this time last year. A growing number of mortgage brokers are now offering three-year fixed buy-to-let mortgages at 3.39 per cent, which is by a significant margin the lowest on record.

‘Like our recent residential mortgage product analysis the Buy-To-Let sector looks like it could be levelling out and moving away from the long period of historic lows in terms of costs and rates’ says a spokesperson on behalf of the report provider.

‘Buy To Let investors can still take advantage of some good savings and low rates when compared to this time last year, however, the mixed and marginal movement in costs over the past three months could be seen as a further sign of stability, or even the start of a period of rises.’

Get in quick

But while all of the above represents good news for buy-to-let investors at all levels, experts are warning those interested in capitalising on the opportunity to do so sooner, rather than later. The reason being that while recent months have brought about a series of generous cost reductions, very few analysts and economists see things dipping any lower than they currently are.

Quite to the contrary, the coming months and years are only expected to see buy-to-let mortgage rates pushed increasingly higher, bringing to an end what is being referred to as a golden age for buy-to-let investment.

Albeit, with the slightly weighty new restrictions and regulations imposed by the government.

‘These incredibly low interest rates have also spurred a significant increase in interest among prospective borrowers seeking alternative, intelligent short-term financial solutions like bridging loans. This comparatively small sector of the lending industry is beginning to show signs of remarkable strength, to such an extent as to pose a direct threat to major banks and High Street lenders.

‘Particularly in instances where buy-to-let financing is required as quickly as possible and with the shortest available repayment period, the bridging loans industry is proving to be a force to be reckoned with in the current market.’

Further reading on buy to let mortgages

Owen Gough, SmallBusiness UK

Freddie Halvorson

Owen was a reporter for Bonhill Group plc writing across the and titles before moving on to be a Digital Technology reporter for the

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