Potential buy-to-let investors are continuing to enjoy a fall in mortgage rates, particularly those looking for a longer-term fixed rates.
Research from Moneyfacts.co.uk shows that not only have these deals fallen to all-time lows, the average fixed rate at 75% LTV has fallen by 0.49% in just six months and is the first time this rate has fallen below 4.00%.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “The reduction in the Bank of England Base Rate to 0.25% has already affected buy-to-let rates, with the average 5-year fixed rate at 70% LTV falling by 0.15% in just one month. In fact all LTVs for 5-year fixed rates have reached the lowest in the market this month.”
With savings rates at record lows, many savers that once used their interest to supplement their income are looking elsewhere, and as bricks and mortar is often deemed a ‘safe bet’ many are looking at buy-to-let as an investment option.
Nelson added: “Whilst the costs of obtaining a buy-to-let mortgage are being driven down, there are other costs to factor in, such as the stamp duty surcharge that was introduced in April this year and the tax relief changes that are coming into play next year.
“As 5-year fixed rates get ever lower, and with more calls for longer-term tenancy agreements, we could perhaps see a shift in the focus of the buy-to-let landlord whereby the investments become a more long-term prospect.”
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|Source: Moneyfacts.co.uk||Compiled: 21.9.16|