31st
Mar 2023
In the past twelve months typical BTL mortgage monthly interest payments have skyrocketed by an average 75.7 per cent, according to a property finance BTL provider.
Landlords who have opted for monthly full mortgage repayment have had to deal with a 31.6 per cent increase.
The finance company carried out an analysis of the current cost of the average BTL mortgage and to what extent monthly repayments have increased by over the past twelve months, which have been attributed to the aftermath of Liz Truss’ dreadful mini budget and inflation.
The study finds that currently the average BTL investor’s mortgage is £217,364 after paying a 25 per cent deposit of the average UK property price of £289,819.
Taking into consideration the average BTL mortgage rate of 5.32 per cent and when making a full monthly repayment, the average investor will pay back £1,312.
However the research shows the average mortgage rate increase in the past year has risen by 2.12 per cent causing the average monthly cost of a full mortgage repayment to increase by 31.6 per cent - an extra monthly cost of £315.
Many BTL investors will have opted to pay monthly interest only repayments, and the company’s figures show that in the present market, the average interest only repayment has soared to £964 per month - an annual increase of 75.7 per cent and equivalent to an extra £415 per month.
The spokesperson for the BTL finance provider, says: “It’s not just residential buyers that will have shuddered at the news of an eleventh consecutive interest rate hike last week, with buy-to-let investors also seeing the cost of borrowing climb substantially.
“These increased mortgage costs will further reduce a profit margin that has already been dented due to numerous government legislative changes in recent years.
“Despite this, we’ve actually seen an increase in the total value of buy-to-let loans issued in the last year which suggests that, despite all that’s been thrown at them, the nation’s landlords are still largely undeterred and the buy-to-let sector itself remains a lucrative one for those looking to invest in the right areas and with the right financing in place.”
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