19th
Jul 2022
The latest research from an online buy-to-let mortgage broker shows the highest month-on-month increase in the cost of typical buy-to-let fixed rate mortgages favoured by landlords.
The online broker says that this month’s costs compared to June means for a typical five year fixed rate mortgage landlords are now having to stump up an extra £59 more per month, including fees, and since the start of the year there is now an overall monthly increase of £174.
A spokesman for the broker, says: “These latest increases are going to shock many. Landlords, like so many people, are being squeezed on all fronts. Increasing amounts of taxation, regulation and the cost of building materials are already impacting margins.
“But whilst mortgage rates remained at such a low level the business of investing in property still made sense for so many. Increased mortgage interest costs such as these which, due to tax changes, now can’t be offset for the majority of landlords as they could in the past, are a real threat to landlord profitability.”
He continues: “There are a range of issues at play in the buy to let mortgage market in addition to rising Bank of England rates that are exacerbating the situation for those landlords looking for competitive mortgage finance. Volatile financial markets have impacted on some lenders ability to stay in the market as they would wish whilst others are swamped with applications and are using the blunt instrument of rates to reluctantly control the flow of business.
“Our advice to landlords is to be ready to move very quickly if they do need new finance by having everything in place to go. Mortgage products can appear and then disappear within a matter of days and therefore to secure a decent rate a landlord needs to have all their information available quickly. For some it may even be worth paying an early redemption fee to jump on a good new deal.”
The typical five year fixed rate BTL mortgage with an LTV of 60 per cent for £160,000 increased from 2.80 to 3.24 per cent with the monthly cost of £388 rising to £447.
For landlords who opted for a two year fixed rate mortgage of £160,000 with an LTV of 60 percent , the increase is slightly less - 2.69 up to July’s 3.12 per cent with a £57 per month increase.
News Archive »