Spike in cost of five-year fixed-term buy-to-let mortgage

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Buy to Let Mortgages:

Latest research out
today (Thursday, March 14) from online mortgage broker, Property Master,
the digital start up that uses algorithms to match the requirements of
individual private landlords against the entire buy-to-let mortgage
market, shows the cost of two out of three categories of five year fixed
rate buy-to-let mortgages had showed a sharp spike in cost compared to the
previous month (February.)  Average product fees were also up markedly.

Property Master’s March
2019 Mortgage Tracker shows the monthly cost of five-year fixed rate offers for
50% of the value of a property jumped by £25 between February and March, the
largest month on month increase the Tracker has ever recorded.  Average
product fees for this type of mortgage also leapt by £287, from £1,212 to
£1,499.  The cost of a five-year fixed rate for 65% of the value of a
property increased from £343 to £350, a more modest rise but again more than
has been seen before.  Average product fees for the 65% were also up by
£30, from £918 to £948. 

The Property
Master Mortgage 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 buy-to-let market including Barclays, BM Solutions, RBS, The
Mortgage Works, Godiva and Precise (full list below) were tracked.  
Figures for this month’s Mortgage Tracker were calculated on deals available on
March 1, 2019.

Angus Stewart, Property
Master’s Chief Executive, said: “Over time five-year fixed rates have
emerged as the product of choice for many buy-to-let landlords. These products
tend to be easier to get through the lenders’ affordability assessments. They
have also offered good value from increased competition amongst lenders and a
more benign interest rate environment has helped to keep their cost down. 
However, what we have seen this month from our Mortgage Tracker is a worrying
development.�

Mr Stewart
continued: “Added to this we have the continued fog around Brexit and possibly
higher interest rates were the UK to crash out of Europe without a deal with
all the turbulence that would bring.  We have another Monetary Policy
Committee meeting next week but given that it will be only days before March 29^th when
the UK is due to leave the European Union we are unlikely to get any more
clarity around interest rates at that time.â€� 

Property Master was
launched almost two years 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. 

www.property-master.com

About Property
Master 

Property Master launched almost two years
ago 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).

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