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Buy-to-let rates rising: Mortgage Brain


The cost of mainstream buy-to-let mortgages is beginning to rise, according to data from Mortgage Brain.

The sourcing system says it has seen a number of cost increases over the past three months.

It says this is due to interest rate rises and PRA underwriting changes beginning to take effect.

The cost of a two-year buy-to-let tracker at 60 or 70 per cent LTV is now 3 per cent higher than it was in November 2017.

These have average current rates of 1.79 per cent and 2.14 per cent respectively.

The cost of an 80 per cent LTV two-year fixed rate, at 3.44 per cent, is now 2 per cent higher than it was three months ago.

Two-year fixes at 60 and 70 per cent LTV are 1 per cent higher than at the beginning of November 2017, as is the average 70 per cent LTV three-year fixed rate.

However, longer-term fixes show rate reductions.

The price of a five-year fixed rate at 70 per cent LTV has gone down 2 per cent in the period, while the same product at 60 and 80 per cent LTV has fallen 1 per cent.

The sourcing system says the buy-to-let sector saw strong product numbers and availability in 2017.

An extra 721 products were introduced into the UK buy-to-let market during 2017, a 32 per cent increase in overall product availability.

This is up from 2,238 in January 2017 to 2,959 as of 15 January 2018.

Mortgage Brain chief executive Mark Lofthouse says: “It looks like the Prudential Regulation Authority changes, coupled with what could be seen as the start of a number of interest rate rises, is starting to affect the cost of mainstream buy-to-let mortgages.

“Buy-to-let product numbers are at a new high, however, and there are still pockets of cost reductions and savings to be had for potential landlords and property investors.

“With the buy-to-letmarket set to become even more complex in 2018, though, we might be on the start of a new path in terms of mortgage cost movement compared to the past few years.”


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