According to research from Octane Capital, which collated data from PropertyData and the UK House Price Index, the average buy-to-let investor is borrowing £271,364 with a 25 per cent deposit.
The average UK property price is pegged at £289,819.
The average buy-to-let mortgage rate is 5.32 per cent, meaning the average investor is paying around £1,312 per full monthly repayment.
The firm said that the average mortgage rate had increased by 2.12 per cent in the last year alone, so the cost of a full mortgage repayment has increased by nearly a third and added £315 to the cost of buy-to-let borrowing.
Octane Capital said that many buy-to-let investors might opt for an interest-only deal, with average interest-only payment going up by around £964 per month, a rise of £415 per month.
Octane Capital’s CEO Jonathan Samuels (pictured), said: “It’s not just residential buyers that will have shuddered at the news of an 11th 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.”
He added: “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.”
