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Buy-to-let mortgage payments climb over £100 in six months – Property Master

  • 10/05/2022
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Buy-to-let mortgage payments climb over £100 in six months – Property Master
Average buy-to-let (BTL) mortgage payments have increased by £103 since January this year, driven by instability in money markets.

According to The Property Master’s BTL mortgage tracker, which collates data from 30 lenders that account for three quarters of the BTL mortgage lending, the cheapest BTL two-year fixed rate for a £160,000 loan at 60 per cent loan to value (LTV) has gone from 2.36 per cent to 2.46 per cent.

This has heightened average monthly costs from £251 to £265 per month once fees are included.

A BTL five-year fixed rate at the same loan and LTV has gone up from 2.48 per cent to 2.58 per cent, meaning monthly payments have risen from £346 per month to £359 per month.

Angus Stewart, chief executive of Property Master, said the “relentless climb” in BTL mortgage pricing predated the Bank of England’s decision to increase the base rate to one per cent.

He said: “The current turbulence in the money markets is also making it more difficult for some lenders to raise funds so there is a fear that as well as higher mortgage costs landlords may also face reduced choice.

“We are recommending to our clients that if they need to remortgage or are planning a new purchase, they should bear in mind mortgage rates are changing and products are being withdrawn on a more or less daily basis.”

Stewart added that whilst BTL mortgage prices looked low from a historical perspective the increase in prices came at a “very bad time”.

“Increased taxes and regulation have already chipped away in recent years on the returns landlords can hope to make. Now increased borrowing costs are making margins slimmer, [and this is] still exacerbated by the government removing mortgage interest relief which had less impact when the base rate was lower,” he explained.

“With accommodation in short supply and rents on the rise it will be worrying to see landlords deciding that the private rented sector is no longer for them.”

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