Research from online mortgage broker Property Master has shown the majority of fixed rate buy-to-let rates are continuing to fall due to lenders competing for landlord business.
The news comes after the broker’s findings from the previous month, which revealed a downward pressure on fixed rate buy-to-let mortgage rates.
According to Property Master’s August 2019 Mortgage Tracker, the biggest fall in monthly cost was for five-year fixed rate buy-to-let mortgage offers for 50% loan-to-value (LTV). The monthly cost of this type of mortgage fell by £13 per month from July to August.
Five-year fixed rates for 65% LTV also fell month-on-month by £5. However, five-year fixed rate buy-to-let mortgage offers for 75% LTV was one of the only two types to show an increase – up £29 per month.
Meanwhile, the cost of two-year fixed rate buy-to-let mortgages for 65% LTV fell by £2 per month and for 75% LTV it was just £1. Two-year fixed rate buy-to-let mortgages for 50% LTV increased by £4 per month.
It says this decline in fixed-rate BTL mortgages could also be a result of the financial markets’ expectations that a no-deal Brexit could force the Bank of England to cut the base rate.
Angus Stewart, chief executive of Property Master, said: “There have been a slew of rate cuts amongst lenders along with new offers being launched that are looking very attractive to landlords wanting to expand their portfolios or needing to remortgage.
“Good news on rates may well entice some landlords back into the market by helping them offset the many recent regulatory and tax costs they have been struggling to absorb.”
He said predicting the outlook on interest rates is difficult with Brexit uncertainty continuing and the Bank of England forecasted to cut rates in light of an exit from the EU.
“If Brexit goes smoothly and some kind of deal is reached then we are more likely to see rates rise in line with the plans to normalise interest rates that the Governor of the Bank of England outlined some time ago,” he added.
Property Master’s tracker follows a range of buy-to-let mortgages for an interest-only loan of £150,000. Deals from 18 of some of the biggest lenders in the BTL market – including Barclays, BM Solutions, RBS, The Mortgage Works, Godiva and Precise – were tracked. Figures for this month’s Mortgage Tracker were calculated on deals available on August 1 2019.