Tue 12 Apr 2016
Rates for buy-to-let mortgages have fallen to record lows, according to comparison website Moneyfacts.
The average two-year fixed rate buy-to-let mortgage has fallen from 5.21% way back in April 2011 to 3.32% this month while the average five-year fix has fallen from 6.24% in 2011 to 4% today.
Charlotte Nelson of Moneyfacts suggests pensioners digging into their retirement pots since new freedom rules in April 2015 could help boost the buy-to-let sector, thus keep lettings agents busy.
She said: A year on from pension freedoms and almost £3bn has been paid out in cash lump sum withdrawals, so it’s highly likely that some of this money has been accessed with buy-to-let in mind.
“Savings rates are currently so poor that many are looking elsewhere to fund their retirement, so lenders have tried to capitalise on this new pool of cash by offering some of the best rates the buy-to-let sector has ever seen.
“In addition, providers also cut rates in the run-up to the Stamp Duty changes in order to attract those keen to buy before they were implemented, which has further aided the downward slide in rates.”
However, she warns there is still more pain to come for landlords, with stricter affordability checks as a result of the European Union’s mortgage credit directive.
Source: Property Industry Eye