October 25, 2011
Buy To Let Mortgage Rates Fall
Analysis of the buy-to-let market confirms rates and in most cases fees have fallen substantially since September 2010, but are still higher than residential mortgages.
David Whittaker, managing director of The Mortgage Business, agreed product pricing would probably continue to trend down as competition in the buy to let sector hots up.
"There has been some arrogance from lenders for a while. Landlords will have looked at the products, saw prices were flat and held back from the market, resulting in a stand-off."
"Lenders have been forced to compete their way out of low lending volumes, so rates have been coming down," he said.
Defaqto figures suggest average two-year fixed rates have fallen from 5.78% to 4.86% in the 12 months from September 2010.
Fees have also fallen on all loans apart from two-year fixes, which rose from an average £2,492 to £2,603 last month. Five year fixes have consistently offered the most competitive fees in the market, falling from £2,122 to £1,956.
However, two-year base rate trackers fell from 5.01% in one year, where three year fixed rates have seen a smaller drop from 6.03% to 5.56% and five year rates have reduced from 5.94% to 5.69%.
In August, the average five-year fixed residential rate dropped below 5% for the first time since Moneyfacts began collating the figures, to 4.99%, from a high of 6.24% in September 2009, with further falls expected.
