Bank of England – Base Rate not moving

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Angus Stewart, Chief Executive of online broker, Property Master commenting on today’s news from the Monetary Policy Committee that the base rate would not be increasing said:

“It does seem as if we have been marched up the hill somewhat by speculation that base would move today but the decision to hold will be received by landlords with a breath of relief.�

Mr Stewart continued:

“Our recent Mortgage Tracker research showed that there are some good deals out there for landlords looking to remortgage or expand their portfolios.  We found that average five-year fixed rates have fallen since the start of the year despite all the speculation around base rate.  Typical savings ranged from £5 to £15 per month.  A number of two-year fixed rates had also fallen.�

Buy-to-let rates have fallen since the start of this year despite base rate rise speculation.

The cost of a typical five-year fixed rate buy-to-let mortgage has fallen since the start of the year despite speculation that at some point the Bank of England will increase base rates again according to a new Mortgage Tracker launched today by 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 of some 2,000 plus products.

Property Master’s Mortgage Tracker also revealed that two-year fixed rates based on 65% of the value of the property and 75% of the value of the property also declined from January to May 1st of this year.  Only two-year fixed rate mortgages for 50% of the value of a buy-to-let property increased over the five-month period and then by 0.42%.  Angus Stewart, Chief Executive of Property Master says, “This is quite a significant increase and perhaps reflects that there are fewer lenders discriminating at the 50% LTV level.  Lenders are clearly taking margin here and giving back on other LTV levels.�

Savings on a five-year fixed rate buy-to-let interest only mortgage on a typical property worth £180,000 ranged from £5 to £15 per month and on some two-year fixed rates from £10 to £15 a month.

“Our findings show that there are some very good deals out there for landlords despite worries over any future increase in base rates.  The Monetary Policy Committee meets again this coming Thursday (May 10th) so we will see what happens then but there may be other factors operating in the buy-to-let market which explains the decline in costs that we have seen,� said Angus Stewart, Chief Executive of Property Master.

Mr Stewart continued: “Our findings come on the back of recent research revealing that the number of buy-to-let products currently on the market has reached a record high[i], so it could be that we are seeing landlords benefiting from unprecedented competition amongst lenders for their business.  This is very good news indeed.�

The Property Master Mortgage Tracker follows a range of buy-to-let mortgages for an interest only loan on a typical £180,000 worth property.  Rates from 18 of some of the biggest lenders in the market including Barclays, NatWest, RBS, the TSB and Virgin money and BM Solutions (full list below) were tracked.

Property Master was launched almost a year ago and aims to shake up the current 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 recently concluded a successful round of crowdfunding through the Seedrs site.  Property Master is automating what was a manual, complex process to provide landlords with a free easy to use mortgage search tool which provides a mortgage quote that’s pre-screened against each lender’s specific criteria.  Over 10,000 landlords have already tried the service and a typical re-mortgage saving is around £1,800.

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