The lender has also introduced some changes to its mortgage terms on some deals.

The cuts are available immediately on Buckinghamshire Building Society’s buy-to-let, standard residential, later life, expat and holiday let products.

Mortgage rate cuts at Buckinghamshire Building Society

Examples of the new range include a reduction from 5.05% to 4.99% on its prime five-year fixed rate deals for those with a 10% deposit.

Its buy-to-let 80% LTV five-year fixed rate is also being reduced from 5.99% to 5.89%.

Meanwhile, Buckinghamshire Building Society’s holiday let two-year discounted rate mortgage at 75% LTV is being cut from 6.19% to 5.89% while is expat holiday let 75% LTV two-year discount is being cut from 6.19% to 5.99%.

Its deposit light dual physical valuation five-year fixed rate is now available from 5.79%, while a non-standard credit three-year fixed is from 5.99%.

The deposit light three-year discount rate has changed to a five-year fixed rate at 5.79%, with dual physical valuation and desktop options, providing security to first-time buyers with a fixed monthly payment.

The non standard credit product has been repriced and changed from a two-year fixed term to a three-year fixed term in an effort to help applicants rebuild their credit profile.

Debt management plans

Buckinghamshire Building Society has also announced that it can now consider applicants who have been in a debt management plan for more than three years.

It can also consider those with a county court judgement for parking fines of up to £250, within the Prime range for residential mortgages.

Meanwhile, the mutual has also reduced its SVR by 0.2% to 8.59%.

Claire Askham, head of mortgage sales at Buckinghamshire Building Society, said: “We are pleased to announce a comprehensive rate reduction across our product range, which further enhances the value we offer to intermediaries and their clients.

“Additionally, we have augmented several products designed to offer more options to borrowers, across a range of mortgage niches.

“This launch cements our support for brokers in an increasingly complex marketplace.”

Reductions apply to mortgage rates up to 75% loan to value (LTV). 

This is the second time this month Accord Mortgages has tweaked BTL mortgage rates after a reduction in pricing owed to the stable market. Yesterday, the lender lowered rates across its residential mortgages. 

From 16 July, Accord Mortgages’ three-year fix at 60% LTV for BTL remortgages has been cut from 4.64% to 4.39%. This has a £3,495 fee, free standard valuation and remortgage legal service.

A five-year fix at 75% LTV has been reduced from 4.89% to 4.64%, which also has a £3,495 fee, free standard valuation and remortgage legal service. 

Also at 75% LTV, Accord Mortgages has reduced the rate of a two-year fixed remortgage from 5.34% to 5.19%. This has a £995 fee, free standard valuation and remortgage legal service. 

At 60% LTV, a two-year fixed rate purchase deal has been cut from 4.99% to 4.84%. This has a £1,995 fee, £500 cashback and a free standard valuation.

Aidan Smith, BTL mortgage manager at Accord Mortgages, said: “We’re taking this latest opportunity to pass on value to borrowers with rate cuts across the range, to ensure they receive the best value possible.

“We’ll continue to closely monitor market trends with a view to further supporting landlords wherever we can.” 

Virgin Money cuts mortgage rates and adds limited-edition deals 

Virgin Money has also reduced mortgage rates and launched limited-edition products. 

The limited-edition seven-day specials are available until 8pm Monday 22 July. 

This includes a five-year fixed remortgage at 75% LTV, with a £995 fee and a rate of 4.4%.

There is also a purchase option, fixed for five years, at 80% LTV. This has a rate of 4.46%, with a £995 fee and free valuation. 

At 90% LTV, Virgin Money has launched a five-year fixed purchase product with a rate of 4.75%. This also has a £995 fee and free valuation. 

Rate reductions of up to 0.18% have been made to select deals, such as the intermediary exclusive five-year fix at 75% LTV fee-saver product, which has gone down by 0.04% to 4.63%. 

The equivalent product at 80% LTV has been reduced by 0.08% to 4.65%. 

Virgin Money’s purchase product under the Own New scheme at 90% LTV with a £995 fee and fixed for five years has been reduced by 0.02% in rate. 

The bank has also lowered select BTL product rates. 

Within its core range, select five-year fixed deals at 90% and 95% LTV have been reduced by as much as 0.02% and product transfer rates at 60% and 75% LTV have been cut by as much as 0.18%. 

Last week, Virgin Money and Clydesdale Bank reduced standard variable rates (SVRs) and other variable pricing.

In an update, the lender said its new business range selected residential fixed rates would be lowered by between 0.02% and 0.14% for purchases and remortgage.

Selected new build fixed rates would fall by around 0.02% and 0.1%.

All large loan fixed rates will decrease by 0.1% and two-year tracker rates will go down by 0.15%.

All buy-to-let fixed rates will fall by around 0.04% and 0.13%.

Santander is also introducing a one-year buy-to-let fixed rate in its product transfer range and new business remortgage range, at 75% loan to value (LTV) with a £1,749 fee for remortgage. .

The firm said it would be withdrawing all new business and product transfer buy-to-let two-year tracker ranges.

In its product transfer range, selected residential fixed rates will go down by 0.03% and 0.11% while all buy-to-let fixed rates will decrease by 0.04% and 0.07%.

Santander said that it had reduced the retention window to just over four months, as the product completion deadline has been held for a second time.

Santander lowered selected residential fixed rates at the start of the month and updated it product transfer policy last week.

Quarterly, however, some regions have lost momentum, with Yorkshire and the Humber losing its top spot in the table and falling to fifth place with an average yield of 7.6%, down from 8.5% last quarter.

Market leader

Top of Fleet’s yield table is the North East, where landlords have seen yields rise by 1.6 percentage points over the last 12 months, from 8.5% to 10.1%.

Taking the second and third places are the North West and Wales with 8.4% and 8.3% yields, a rise of 0.9 and 1.3 percentage points respectively.

Ranking in last place is Greater London, where landlords saw yields rise by 0.8 percentage points to 6.1%.

Overall, average rental returns rose by percentage point from 6.6% to 7.6% between Q2 2023 and Q2 this year.

There remains an ongoing North/South divide, with regions in the North topping the table.

However, Greater London, the South East, East Anglia, and the South West have not just seen average yields increase yearly, but also quarter-on-quarter.

Landlords in Greater London, however, are still receiving the highest average monthly rent at £2,024, followed by East Anglia at £1,594. Tenants living in the North East are typically charged the most affordable rents, at £768 on average.

Rising yields are no surprise, said the lender, when tenant demand continues to outstrip the supply of available properties.

Anticipated rate cut

Fleet said it anticipates movements in the bank base rate and swap rates to determine short-term product pricing, with the expectation that the Bank of England would cut rates in August or September, and swaps reflecting the market belief that rates would continue to fall.

Steve Cox (pictured), chief commercial officer at Fleet, said: “The requirements for an ongoing strong yield are clearly not going away, particularly in a higher-interest-rate environment in which many refinancing landlord borrowers are having to pay far more for their monthly mortgages than they did up to five years ago.

“When it comes to mortgage pricing, it showed a clearly increase in quarter two. However, with inflation now down to target, once we have the general election out of the way, we would anticipate a base rate cut in either August or September, and swap rates will move to reflect further cuts in the not-so-near future.”

Economists have echoed Fleet’s sentiment, predicting a rate cut will arrive in August, reducing the base rate from its current position of 5.25%.

Fleet’s average loan size decreased on the previous quarter, down from £196k to £171k. However, the average rental cover at loan origination continued to increase from 175% to 178%.

Property purchase business in Q2 2024 increased, with 42% from landlords who want to buy a property, compared to the longer-term quarterly trend of 30%.

Some 80% of all Q2 2024 applications were for limited companies, while 20% were made by private investors.

The Guernsey-based investment management firm’s introductory buy-to-let fixed rate has been reduced from 6.99% to 6.49% for a limited period.

The buy-to-let deal is available up to 65% loan to value (LTV). Loan sizes of between £50,000 and £4m are available for a single property, or up to £8.5m to a single borrower.

The 6.49% introductory fixed rate is available to UK expats and non-UK residents on the condition that they complete before 31 October 2024.

The buy-to-let property must be located in a major UK town or city.

Ben Nichols, interim managing director of Raw Capital Partners, said: “As the company continues to grow, we’re seeing increased demand from brokers working with international clients – a group that often struggles to find support from other lenders.

“Appetite for UK residential property remains strong among international investors, so our focus is on ensuring they are well served from a finance perspective.“

Last month, Raw Capital Partners announced the allocation of more than £100m towards lending to foreign nationals and UK expats.

The company plans to grow the Raw Mortgage Fund from £185m to £1bn in the coming years.

This includes products for both new and existing borrowers, across two-, three- and five-year fixed options between 65% and 95% loan to value (LTV).

This includes a five-year fix at 85% LTV priced at 4.88%. This is available to first-time buyers and has a £500 cashback incentive. 

There is also a two-year fix at 75% LTV with a rate of 4.89%. This has a £999 product fee and is available to existing borrowers. 

CHL Mortgages cuts BTL fixed rates 

Specialist lender CHL Mortgages has reduced fixed rates across its buy-to-let (BTL) options and amended criteria. 

Its two-year fixed rates have been cut by up to 0.42% and pricing now starts at 2.87%. 

This headline rate is available with a two-year fixed standard BTL option at 55% LTV with a 7% fee. 

Options are available up to 75% LTV with a choice of fees. 

CHL Mortgages’ criteria changes include an increase to the maximum loan size at 70% LTV, which is now £2m. 

The lender has also increased the aggregate borrower exposure to £5m with no limit on the number of individual loans. 

The maximum LTV available for new-build flats has been increased to 75%, as has the limit for ex-local authority flats. 

The lender will also now accept applications for properties on the Isle of Wight. 

Products are open to individual, limited company and house in multiple occupation (HMO) or multi-freehold block (MUFB) landlords. 

Ross Turrell, commercial director at CHL Mortgages, said: “This range refresh is the latest example of how committed we are to supporting intermediaries in helping their landlord clients achieve their buy-to-let ambitions. 

“There aren’t many other deals out there at the moment where the rate starts with a ‘2’, and with the potential for the bank base rate to reduce in the coming months, our repriced two-year fixed rate products could be ideal for those who don’t want to lock in to a long-term mortgage. 

“It’s another positive demonstration of how our recent acquisition by Chetwood Financial is adding value and helping us to expand our offering to our intermediary partners.” 

The adverse credit BTL product from Buckinghamshire Building Society is available with a three-year discount of 2.4% on the lender’s standard variable BTL rate to give a 6.39% pricing. 

It is available for loans of up to £500,000 up to 75% loan to value (LTV). The product has no application fees and a product fee of £1,195. 

It is open to landlords who have missed payments on secured and unsecured loans, with defaults, county court judgements (CCJs), mortgage arrears, and payday loans. It will also consider borrowers with missed utility payments. 

The product is open to individual and limited company landlords with a maximum of three BTL properties, including regulated and consumer properties. 

Claire Askham (pictured), head of mortgage sales at Buckinghamshire Building Society, said: “Our buy-to-let non-standard credit mortgage is a new area of lending for the society, and fills an important gap in the market. Brokers are crying out for more options for their landlord clients who have experienced minor credit issues, with an insufficient level of choice on the market currently. 

“Landlords have not been immune to the cost-of-living pressures, and will benefit from the flexibility built into our new product. Buckinghamshire Building Society is determined to work closely with brokers, and ensure our proposition meets the needs of their clients.” 

The mutual recently upped the maximum LTV across its BTL lending, with a five-year fix available at 80% LTV. 

MFS’ bridge fusion product is a two-year tracker loan with an annual interest rate, and can be extended for a third year if needed. 

The company said this would allow borrowers to wait for market conditions to improve during periods of uncertainty and instability. 

The pay rates start from 3.55% plus base rate per annum, with a loan to value (LTV) of up to 75%. The maximum loan size is £20m. 

The product is available for loans against commercial, mixed use and residential properties. 

The specialist lender has also reduced rates within its core bridging range by up to 0.11%. 

The product also allows for the use of deferred interest, rolled-up interest and top slicing. These options are also available across MFS’ BTL mortgage range.

Paresh Raja, CEO of MFS, said: “Optionality has become a keen focus for MFS in recent years. We’re continuing to expand our offering across both our bridging and buy-to-let mortgage ranges, as well as reducing rates across the board, giving brokers and their clients much-needed choice as they seek the right product for their needs.

“This includes a blend of tracker and fixed terms, as well as the term length. The new bridge fusion product is a perfect example of our desire to keep evolving, and the timing makes complete sense.” 

He added: “As banks are slowing down with their lending activities in a year, with potentially over £50bn of commercial refinances required, we are reducing our bridging rates and launching new products in order to ramp up. 

“The general election will create more uncertainty over the coming weeks and months. We all knew it was coming, but few expected the vote to come in early July – and although it was formed before Rishi Sunak’s surprise announcement, our bridge fusion product is designed to help borrowers navigate such twists and turns in the market with greater confidence.” 

According to an analysis of UK Finance data by BTL lender Paragon, this was due to the stamp duty surcharge on additional properties, which was introduced in 2016. 

This was a fall from a 39% share of BTL purchases in the South East, Greater London and the South West in 2022, and down from a high of 52% in 2015 – the year before the tax was brought in. 

Since 2015, the share of BTL purchases in South England has steadily fallen year-on-year. This was excluding 2020 and 2021, when the stamp duty holiday was in place. 

Looking at each region independently, the share of BTL-mortgaged purchases in Greater London fell from 19% in 2015 to 12% in 2023. Purchases in the South East declined by 24% to 17% over the same period, while in the South West, this reduced by 9% to 6%. 

Most of the other recorded regions saw a growth in BTL-mortgaged purchases over that time period, such as the North West, where there was a jump from 9% to 14%, and Yorkshire and the Humber, where this rose from 6% to 10%. 

East Anglia was the only region not in the South of England to see a decline in BTL purchases from 2015 to 2023, but this was only a small drop from 4% to 3%. Paragon said this was due to the East of England having higher-than-average house prices. 

Disproportionate impact on certain markets

Richard Rowntree (pictured), managing director of mortgages at Paragon, said: “The introduction of the stamp duty surcharge disproportionately impacted those markets with above-average house prices in the South of England. For example, compared to 2015, the number of homes purchased with a buy-to-let mortgage was 70% lower last year, and a greater number of buy-to-let homes were purchased in the North West than in London during three of the past five years. 

“Over the long term, it’s clear that we will need more rental homes and a vibrant private rented sector across the UK. With the population forecast to increase by 9.9% – or by 6.6 million people – by 2036, demand for rental property is only going to be stronger. That is particularly true of areas in the South of the country – particularly London, where the transient population means that a strong supply of rental homes [is] vital.” 

He added: “We are seeing the private rental sector utilised by a broader range of people than ever before, and those who want or need to rent a home should expect to be able to choose from a range of fairly priced, decent-quality rental homes. Unless supply is boosted to meet forecast growth in demand, rents will only grow higher in markets with extreme supply/demand imbalances.” 

A slight uptick in BTL product availability seen this month was a welcome sight, with deal numbers rising month-on-month in April from 2,844 to 2,883 following a fall of 276 BTL deals between January and February, according to Moneyfacts.

But brokers say that, despite the rise in deal numbers, a lack of innovation means the dire situation for landlords struggling to refinance or expand their portfolios remains the same.

Ash Jensen, director of Make My Mortgage, said: “Looking at the recent product releases, there’s nothing there that will be game-changing for many people. I wouldn’t class them as new products, they’re just changing rates with different fees, there’s nothing beneficial there.

“I think it’s more for publicity if anything to keep themselves in the forefront of your mind. The fees are so high. Some of the deals have a 1.5% or 2% fee. If you’re buying in London and need to borrow £300,000, those fees add up. The rates and fees are even higher for limited company buy-to-let. Yes there are tax benefits from owning properties through a company, but these deals are really restricting the market.”

Different combinations

Different fee and rate combinations make up the bulk of new deals coming to the market, say brokers. To secure a lower rate needed to pass the income coverage ratio (ICR), or to maximise your borrowing when capital-raising, some landlords need to pay a high fee, which can range from 1.5% of the mortgage to 7%. Some lenders will then allow landlords to add the fee to the loan without it affecting the stress test. Landlords searching for a low or fixed fee must accept a higher mortgage rate, which could scupper their chances of meeting the ICR requirements.

Adding more fee variations, which boosts deal numbers, is not improving the product landscape, say brokers, particularly for landlords with properties worth £250,000 or more.

Gaurav Shukla, senior mortgage broker and owner of Home Me Mortgages, said: “We’re just seeing more of the same from lenders where they launch a lower rate with a high percentage fee to help landlords bypass certain situations. But we’re not seeing the launch of better products, and the lower rates aren’t appealing because of the high fee attached to it.”

Shukla said a lot of his clients were sticking with the fixed-fee option rather than going for a percentage-based fee, typically around 3%, because they have high-value mortgages.

“They don’t want to add more than £10,000 in fees to their loan,” he said. “They would prefer to borrow less now and refinance again in a couple of years when everyone hopes rates will have come down.”

‘We’re lucky we have a rate switch market’

Opting for a rate switch with the same lender or sitting on their lender’s standard variable rate (SVR) until rates fall are the only two options available to some landlords who have mortgage balances too high to meet ICR requirements in a higher rate environment.

“We’re lucky we have a rate switch market,” said Damian Youell, mortgage broker and director of NeedingAdvice.co.uk. “There wasn’t one three or four years ago.”

While the market waits for the Bank of England to decrease rates, brokers say lenders should play around with their criteria, such as scrapping minimum income requirements, instead of playing around with rate and fee combinations.

Youell said landlords need lenders to change their affordability calculations, particularly for higher-value properties. “They are restricted by the rent versus the mortgage balance. The calculations don’t stack up in many cases.”

With a lack of product innovation coming through to the market, Youell says he’s looking to more specialist lenders such as Aldermore for his clients who want to expand their portfolios. While the lender may offer higher rates, Youell says they take a more flexible approach to their underwriting.

Howard Levy, director of property finance at SPF Private Clients, says having higher fee options combined with lower rates does help landlords pass stress tests, but he wants to see more innovation, such as the return of five-year fixed rates with three-year penalties.

He also wants to see lenders introduce more leniency to their stress tests, rather than using one standard stress test. “They should consider, based on the rents being collected, whether you’re making a profit across your portfolio. It needs to be cleverer than it is; it’s currently very linear.” Allowing landlords to use surplus rents on one property to pull over to another that needs a boost to pass the ICR was another example of innovation Levy would like to see.

If you are interested in learning more about the BTL sector, then register for The Buy to Let Forum, which takes place between 24 April and 2 May in Bolton, Birmingham, Cardiff and Reading.