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A stamp duty hike hangover and Brexit have pushed lenders to slash buy-to-let rates and bump up how much they'll lend to landlords who are delaying investment.
Santander, Nationwide, Aldermore, Pepper Home Loans, Precise Mortgages and Nottingham Building Society have all dropped their buy-to-let rates or raised their maximum loan-to-values for landlords in the past few weeks in a bid to entice landlords to remortgage or invest in new properties.
Bob Young, chief executive at specialist buy-to-let mortgage lender Fleet Mortgages, said: 'Quite simply, it’s a lack of business that is driving down rates.The Mortgage Works, the specialist buy-to-let arm of Nationwide confirmed it will bring down its rates across the board.
This includes a two-year fixed rate at 65 per cent LTV with £995 fee which is now 2.49 per cent and a 65 per cent LTV fee-free two-year deal fixed at 2.79 per cent.
For those with a 25 per cent deposit or equity, two-year fixed rates have been cut to 2.09 per cent for those paying a 2.5 per cent fee, to 2.39 per cent with a £1,995 fee, to 2.69 per cent with a £995 fee and to 2.99 per cent with no fee.Ying Tan, of adviser The Buy to Let Business, agreed that mortgage lenders are doing all they can to tempt landlords.
He said: 'It’s news to no-one that these are challenging times for buy-to-let and as a result many landlords are cautious when expanding their portfolios at present.
'The cuts to landlord tax relief set to come into play next year, the stamp duty hike for investment properties that came into effect in April and the general market uncertainty caused by the EU referendum has had a big impact on the market and lenders are obviously keen to encourage investors to take the plunge.'Figures from the Council of Mortgage Lenders showed the number of buy-to-let mortgages taken out for purchase was just 4,200 in April having been 28,700 in March 2016. The number of landlords investing in April was also just half of that seen a year ago. Buy-to-let purchases fell 51 per cent from the 8,600 recorded in April 2015.Full/source story Related content:How will Brexit affect your property plans?Cameron resignation presents new opportunity for landlords Osborne facing calls to resign What effect do you think Stamp Duty increases will have on property prices?
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
If they want LL to take the plunge then offer Base rate tracker at 1.5% ABBR differential for 40 or 50 years or age 95 whichever comes sooner.
No requirement to pay money to keep LTV the same if property prices reduce and no sneaky exceptional clause to get out of the differential IR margin
I can guarantee that if a lender offered such a product most LL would wish to switch to it!!!
Lenders had such products when the BoE rate was 5%
LL don't want these churn mortgages which only exist to grab fee income for the remortgage process
Long term tracker mortgages as in the USA are the way to go.
This produces a stable market.
your concerns on short rate terms are understandable. How about a lifetime variable rate, current pay rate 2.49%, free valuation and legal switching package? Max 35 year term, max age at end of 75. These products are available, just speak to your friendly Property Tribes brokers.
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The Dudley Building Society has this morning announced rate cuts across its BTL mortgages:Dudley Building Society has announced this morning that it has released a new range of products aimed at the BTL market.
The range includes two new discounted rate for term products available from 3.19% up to 70% LTV (previously 3.99%) and 3.49% up to 75% LTV (previously 4.24%).
Also available are two three-year fixed rate products at 3.29% up to 70% LTV (previously 4.24%) and 3.59% up to 75% (previously 4.49%).
All products are available for purchase and remortgage, have no upper age limits and have tiered BTL rental calculations from 125% dependent on LTV (125% for up to 70% LTV and 130% for up to 75% LTV; 140% for flats across all LTVs).Full/source story
This is indeed good news - at least the lenders are going in the right direction, because I was very much afraid that they would reign in their lending as they did after the credit crunch.
I think we might see more risk-averse activity on the high street, where mainstream banks were hit hard by the Brexit backlash. Challenger banks and specialists are well-placed, as they were following the tax clampdown, to benefit.
The need for housing didn't disappear overnight when the UK cast its vote. Banks are more liquid and more resilient than they were in 2008 and if they don't fail, they will need to keep doing business.
There's no foregone conclusion at this stage. Credit conditions could tighten if the Bank of England seeks to head off inflation, or as lenders' appetite diminishes. But equally the Bank could lower rates to prevent the country from falling into recession. I think one needs to consider market fundamentals and operate on the basis of where the banks will be when things eventually stabilise, as they inevitably must. Financial institutions hate uncertainty and always gravitate towards a 'new normal' wherever possible.
Writer: Commercial Trust Limited Follow us on Twitter: @CommercialTrust Please note that anything I write is for information purposes only, and not to be construed as advice. Commercial Trust is regulated and authorised by the Financial Conduct Authority. Registration number 610175.
Any changes from kent reliance? that would be good if so for me
InterBay Commercial has slashed borrowing rates on its buy-to-let and HMO ranges.
The company, which forms part of specialist lending group OneSavings Bank plc, yesterday announced that it is cutting its entire range of buy-to-let and HMO rates. Variable rates will now start from 4.2%, and 5 year fixed rates, which are stress-tested at pay rate, will start from 4.4%.
The reprice is supported by simplification of the range with the removal of the 70% and 80% loan-to-value brackets for buy-to-let and HMO, providing simpler product ranges that continue to meet clients’ needs.Ray Boulgar of John Charcol forecasts that many lenders will follow HSBC’s lead and slash five-year fixed-rate mortgages priced to below 2% and advised those thinking about taking out a fixed deal to “hold off for a week or so and see where the market settles down”.Full/source story
Another lender has announced rate cuts:Precise Mortgages has launched a range of new residential and buy-to-let products in response to the EU Referendum vote.
Managing Director Alan Cleary said the changes were as a result of "financial turmoil" following the Referendum, which resulted in "an expectation that the Bank of England will reduce the base rate in the coming months. This has translated to a significant drop in the cost of 5 and 10 year money".
Five year fixed buy-to-let rates have been cut by 0.14%, starting from 3.85%, and new 10-year fixed rates have been introduced from 3.99%.
The new residential range is available up to 85% LTV and includes 10 year fixed rates from 3.79% and six year fixes from 3.59%.Meanwhile TSB has today introduced a £250 cashback offer for landlords, which is available across all buy-to-let products available directly and through TSB Intermediary.
The £250 cashback will be paid to all landlords on completion of the mortgage, and is available on two, three and five-year fixed terms as well as a two-year tracker.
Great news. Anyone aware of new offers for HMOs?
current HMO deals start at 3.69% at 75%LTV. There is a 2.75% teaser, but this is stepped over 5 years and the rate increases to 4.75%. Obviously, all rates are dependanty upon your circumstances and needs. Please contact us at Property Tribes Financial Services.