Leaders: Great Expectations
Fall in buy-to-let mortgage rates to boost returns for landlords
Significant reductions in mortgage rates have made the buy-to-let sector more attractive than ever to investors.
New statistics from Moneyfacts.co.uk show an average five-year fixed rate mortgage for a 75 per cent loan-to-value deal has dropped to 3.96 per cent, the first time it has fallen below four per cent.
It means the rate on this type of mortgage – popular with many buy-to-let investors – is now 0.49 per cent lower than it was six months ago.
Allison Thompson, managing director at property specialist Leaders, says: “The cost of borrowing for investors has fallen considerably in recent months, meaning many landlords will be able to enjoy a much greater return from their property portfolio.
“With lower mortgage costs and the trend for longer tenancies, buy-to-let remains not only the best-performing investment type in the UK, but also a secure long-term option.
“Of course, there are other costs to consider when investing in property – such as agent fees, stamp duty and ongoing maintenance – but mortgage repayments will be the primary expense for many investors, so such sizeable reductions in rates is extremely good news.”
The research found buy-to-let mortgages with all loan-to-value ratios have reached their lowest point in history in the last month.
An average five-year fixed rate of just 3.48 per cent is available to those with a loan-to-value of 60 per cent, down from 3.61 per cent in August and 3.73 per cent in March.
Allison adds: “Current mortgage rates have created a golden opportunity for investors looking to enter the buy-to-let market and benefit from a return that far exceeds those delivered by other investment options such as stocks and shares.
“However, it is still important to seek expert advice on what to buy, where to buy and the likely rental return of a property. This will help investors to do all the sums required in advance to work out exactly what they stand to gain by buying to let.”
For more information or advice on the buy-to-let market, contact your local Leaders branch or visit leaders.co.uk.
