New Year cheer for landlords as BTL mortgage rates plunge
- 27th January 2017
- Buy-To-Let Property News
Buy-to-let lending also reaches highest level since Stamp Duty surcharge introduction in March 2016
Landlords are enjoying some New Year cheer, as interest rates on buy-to-let mortgages have fallen to a five-year low this month – hitting an average of just 3.44% for a fixed rate deal and 3.23% for variable-rate products*.
Cutting the cost of servicing mortgage repayments will be welcome news for landlords as it will reduce the impact of rule changes which will decrease mortgage interest tax relief coming into force from April.
The falling cost of borrowing comes as, towards the end of last year, buy-to-let lending reached its highest level since the Stamp Duty surcharge on investment properties was introduced last Spring. Council of Mortgage Lenders’ (CML) data show that some 21,000 BTL loans were issued in November last year (latest figures), 13% up on the previous month.
While cuts in mortgage rates are clearly good for landlords, helping them keep their costs low, it should also help maintain stability of supply in the rental market.
Stephen Ludlow, Chairman at ludlowthompson comments: “Ensuring that there is a sufficient supply of good quality, affordable rental properties is vital, especially in London where demand is high as young professionals, students, and families continue to settle in the capital for work.”
“As landlords weigh up the impact of recent and forthcoming changes to the buy-to-let market on their business models, significant reductions in the cost of borrowing put an important tick in the plus column. This has boosted confidence and helped to keep the market strong.”
*According to Moneyfacts data