Buy to Let mortgage pricing reaches ‘psychological’ 6% mark
Mortgages for Business, the leading specialist Buy to Let mortgage broker is warning landlords almost all Buy to Let products in the marketplace are now priced above a ‘psychological’ 6% - a trend they expect to continue for the foreseeable future.
Cheltenham and Gloucester last week withdrew their well priced 5.89% five year fixed mortgage replacing it with 6.29% five year fixed rate.
Jonathan Moore, head of marketing at Mortgages for Business comments: “Other than a few exclusives available for a limited period, all mortgages on our sourcing system, which searches the market, are priced above 6%. This is first time we have seen this situation this year and certainly for several years. Lenders with mortgage products below 6% have been flooded with applications and have been forced to withdraw products that have only been available for a matter of days.”
“Although the repayments between a mortgage at the high end of 5% and the low end of 6% are small, there does currently appear to be a negative perception around this price point for Buy to Let investors. At present we are in the process of educating our clients about the level mortgages are priced at, especially investors who haven’t remortgaged for a couple of years who could be coming off a 4.99% fixed product.”
Despite the £50bn placed in the market to ease liquidity from the Bank of England, LIBOR the basis for mortgage pricing remains approximately 0.75% above Base Rate and this therefore continues to keep up the pressure on mortgage pricing.
Jonathan Moore continues: “The liquidity and mortgage pricing is having some favourable benefit for many landlords across the country. Firstly the smaller pool of first time buyers has increased rents by an average of around 4% according to ARLA. Secondly house building is at its lowest level for a decade heightening potential supply and demand issues in the areas such as the South East. Finally more people may look to short term renting after selling their principle property as they wait to see if prices will fall further.”
For more information call Mortgages for Business on 0845 345 6788 or visit
