Mortgage rates for buy to let landlords have begun to stabilise according to the Buy to Let Mortgage Product Index published by Mortgages for Business.
Between February and March this year average rates for both fixed and tracker buy to let mortgages hardly moved suggesting that heated competition on price between lenders might have come to an end.
Commenting on the data in the Buy to Let Mortgage Product Index for March 2015, Jeni Browne, Head of Buy to Let and Regulated Lending at Mortgages for Business said:
“Lenders are tinkering around the edges on price and there are some really great deals out there from the mainstream buy to let lenders and the specialists. The new lenders too, have come into the market with some favourable rates and criteria that will benefit new, part-time and more full time landlords.”
Full time landlords – those whose income is derived solely from rent - often go for non-standard, higher yielding properties such as Houses in Multiple Occupation (HMO), blocks of flats and semi-commercial properties. They also tend to have more complex circumstances which means that they don’t always fit the profile of the mainstream lenders.
Jeni went on to say:
“Whilst more complex scenarios do cost more, pricing is probably the best it’s been amongst the specialist lenders. We are in constant communication on cases with the likes of Landbay, Fleet Mortgages and of course Axis Bank with whom we are currently running a pilot before they launch on 27th April 2015.”
“We are busy too with the more established specialists like Keystone, Kent Reliance and Shawbrook, particularly on remortgaging as experienced landlords continue to unlock capital in their properties for improvements and portfolio expansion.”
The index also found that average product numbers had risen from 827in February to 863 in March. This is mostly likely due to new entrants including Foundation Home Loans and State Bank of India.
Whilst the majority of products are available at less than 75% loan to value, just over a third, 38% ,are available at 75% loan to value, down from 40% in February. Just 9% of products are available at 80%+ LTV and these products come with stricter lending criteria and cost more.