Buy to Let Mortgage Rates

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Buy to Let:

The BTL mortgages rates have trended upwards following the bank base rate rise in August.

August’s 0.25% increase in the bank base rate has begun to feed through to buy-to-let mortgage rates, according to research carried out this week from online mortgage broker, Property Master. The company uses algorithms to match the requirements of individual private landlords against the entire buy-to-let mortgage market.  The news comes as the Monetary Policy Committee prepares to meet again Thursday 13^th September, 13.

Average standard variable rates for buy-to-let mortgages, unsurprisingly, saw the biggest month on month increase with the cost of an interest only loan of £150,000 jumping from £603 per month to £620 per month.

For average five-year fixed rate loans, increasingly popular with private landlords looking to manage their outgoings over time, the cost of a similar loan rose from £348 per month to £350 per month. That’s if the customer was looking to borrow 65% of the value of the property, and it goes from £423 per month to £425 per month if 75% of the property’s value was required.

The Property Master Mortgage Tracker* follows a range of buy-to-let mortgages for an interest only loan of £150,000. The rates and costs recorded include product and application fees.  Deals from 18 of some of the biggest lenders in the buy-to-let market including Barclays, BM Solutions, RBS, The Mortgage Works, Godiva and Precise (full list below) were tracked.

Angus Stewart, Property Master’s Chief Executive, said:

“The move by the Bank of England to normalise borrowing rates following the last market crash seems to be truly underway and it is beginning to feed through to buy-to-let mortgage rates which up and until now have been relatively stable.  The MPC meets again this coming Thursday but market commentators are not yet expecting another rate rise quite so soon.

“However, private landlords, especially those on standard variable rates that have seen a big jump in cost month on month, should really be carefully evaluating their finance requirements.  Whilst increased competition has helped to keep costs down to some extent the trend is now upwards and we would expect keenly priced fixed rates to be snapped up.�

Property Master was launched a year ago and aims to shake up the buy-to-let mortgage market currently served by around 12,000 mortgage brokers.  It has already attracted financial backing from a broad range of private investors, including a minority stake being taken by LSL Property Services, whose estate and letting agency brands include Your Move and Reeds Rains.

Property Master has automated what was a manual, complex process to provide landlords with a free, easy to use mortgage search tool which provides a mortgage quote that is pre-screened against each lender’s specific and changing criteria.  Over 25,000 landlords have already tried the Property Master service and a typical remortgage saving is around £1,800.

Property Master launched last year and is the UK’s first and only digital mortgage brokerage service for UK buy-to-let landlords. Its innovative approach enables private landlords to take control of their financing online for the first time by matching their requirements on Property Master’s unique and complete database of mortgage information and lending criteria. Founded by a group of highly experienced financial services professionals, the company is directly authorised and regulated by the Financial Conduct Authority (FCA).

*Property Master tracked the average cost of mortgages across the following lenders: Accord, Barclays, BM Solutions, Godiva Mortgages, Halifax, HSBC, Leeds BS, Metro Bank, NatWest, Platform Mortgages, Precise Mortgages, Principality BS, Royal Bank of Scotland, Santander for Intermediaries, Skipton BS, The Mortgage Works, TSB and Virgin Money.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Buy to Let Mortgage Rates | LandlordZONE.

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HMO Licence – self contained flats

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I own a shop with 8 COMPLETELY self contained flats above.

There is some confusion with Hackney council on the HMO issue.

For mortgage reasons and other, I DONT WANT THEM TO BE HMOS. Hackney said if they comply to 1991 Building Regs(or if not if they can be made to comply)

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Hybrid Tax Structure – Landlords BEWARE!

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The hybrid structure is nothing new. In simple terms it’s a partnership, whereby one or more of the partners is a Limited Company, plus in some instances an offshore pension trust structure such as a QNUPS.

However, the way the structure is currently being touted by one particular firm as a ‘one-size-fits-all’

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MLAR stats show BTL lending decline in Q2

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The Bank of England’s Mortgage Lenders and Administrators Statistics (MLAR) – 2018 Q2 show the share of Buy to Let lending has declined since 2018 Q1, accounting for 13.1% of new lending. This is down from 14.2% last quarter.

2018 Q2 has seen an increase in mortgage lending activity when compared with the previous quarter.

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Call of the week- Responsibility for clearing up leaves on path

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A landlord phoned us this week with a question relating to leaves on the path of his property. As the leaves are beginning to fall, this week’s Call of the Week is a common one from landlords at this time of year. A landlord phoned up saying that his tenants had been concerned about the […]

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New mandatory HMO licensing rules fast approaching – 1st Oct

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The October 1st deadline for new mandatory licensing rules of HMOs is only weeks away. There has been almost no government assistance in the form of information campaigns considering the latest .Gov website update says landlords could get an ‘unlimited’

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New HMO licensing requirements in force soon

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HMO Licensing Reform:

The October 1 deadline for the new rules on mandatory licensing is approaching soon, when many existing landlords in England will be drawn into the mandatory HMO licensing net.

These guidelines apply primarily to England. Other regions and jurisdictions are similar but there may be important differences. This is not a definitive interpretation of the law, every case is different and only a court can decide. If in doubt seek expert advice.

Currently only those HMO properties with three or more storeys, and shared by five or more persons from two or more households are included. They must also be sharing facilities such as kitchens and bathrooms.

Failure to register with the local authority when offering these types of facility will land the landlord (or agent responsible for management) in serious trouble – there are severe penalties including criminal convictions for breaching the rules.

From the 1^st of October 2018 the “three or more storeysâ€� criteria in England will go.  This means that all those landlords housing multiple occupants – five or more people in two or more households sharing facilities – regardless of the configuration of the property – will need to have a mandatory HMO licence.

Purpose built flats within a block comprising three or more self-contained flats are excluded, and there are also some Statutory Exemptions:

• Any property occupied by just two people who form two households;
• Buildings managed by a local housing authority, registered social landlord, police or fire & rescue authority or a health service body;
• Buildings already regulated under certain other statutory provisions (Schedule 1 to SI 2006 Number 373)
• Certain student halls of residence;
• Buildings occupied principally for the purposes of a religious community whose principle occupation is prayer, contemplation, education or the relief of suffering; and
• Buildings owner occupied with no more than two lodgers.

Many landlords and agents will be unaware of the coming changes as there has been little publicity in the media about them and no government awareness campaign.

When a rental property is unlicensed, whether this is a mandatory HMO license or if the property comes under a local authority additional licensing scheme, a valid Section 21 notice cannot be served.

Landlords with properties falling into this HMO category, and there are said to be many thousands affected, if they have not done so already, should be making arrangements to have them licensed now – there will be no grace period.

Basically, an HMO is any property (house of flat) occupied by three or more people comprising two or more households who share facilities (kitchen, bathroom and/or toilet), even when they occupy the property on a single tenancy.

With these properties the HMO “Management of Houses in Multiple Occupation (England) Regulations 2006” apply, but they do not necessarily need a mandatory licence unless the circumstances above apply.

There are three types of property licensing schemes operating in England:

• Mandatory HMO licensing
• Additional licensing
• Selective licensing

Whereas mandatory HMO licensing applies when required throughout England, additional and selective licensing schemes only apply in certain areas, where the local authority has implemented such a scheme.

Landlords and agents should always check with their local authority, where the rental property is based, to see if there is a scheme in operation, as it will have serious implications for letting a property.

Houses in Multiple Occupation and residential property licensing reform – see here

The Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018 – see here

Houses in Multiple Occupation

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – New HMO licensing requirements in force soon | LandlordZONE.

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