Increases on the way

Small recorded rises in mortgage rates for landlords herald a long-term increase in the cost of finance, loan experts have warned. As all will know the Bank of England increased the base rate with a “mild” warning of more to come.

Data released, show that the average rates for two-year and five-year fixed buy-to-let mortgages rose this month for the first time in close to a year.

And while the average rise is small - 0.05% for a two-year fixed deal - many say it sets the direction for a prolonged increase. Quote, “It’s rather like an iceberg. This rise is the part you can see above the water line, but underneath there’s a lot more damage going on”.

The trend is upwards and now is the time to get on the fixed rate ship before it leaves the harbour.

The Bank Rate is starting to move and the risk is it becomes an escalator and it moves again in February and then it moves again and again. It would seem sound advice for any landlord to review their current mortgage deal sooner rather than later.

Interest rates on the way up

More than 16 individual lenders who have upped their mortgage rates in the last few weeks, and more are expected to do so in the very near future. That means that those who have gotten used to the record low mortgage rates we've been enjoying may be in for quite a shock – so best advice if you require a mortgage or re-mortgage is to act NOW. The reason why so many providers are either increasing their rates or at least considering doing so is a recent speech by Mark Carney, governor of the Bank of England, which has fuelled speculation that base rate may rise as soon as November.

However, even if the base rate doesn't rise this year, it shows lenders are keen to increase rates. Unfortunately, with rates at rock bottom levels the only way from here is upwards.

Buy-to-let averages creeping up

Because of these changes, the average two-year fixed rate has gone up from 2.17% on 25 September, before most of the rate rises occurred to an average of 2.25%. Similarly, the five-year average rate has crawled up from 2.75% to stand at 2.83%.

Landlords are you ready for winter?

Landlords are being encouraged to make crucial preparations to their buy-to-let properties as the winter fast approaches, after a new survey revealed that almost half of private landlords fail to carry out essential, pre-winter checks.

To avoid expensive repair bills, it is important to take preventative action. A few simple checks on your property prior to the cold really settling in will help keep your tenants happy over the winter and hopefully help ensure that you remain stress free.

With profit margins so tight these days it is essential to ensure let properties are in good repair as neglect can very expensive.

Those who don’t act in plenty of time, run the risk of any issues escalating and therefore, costing more to rectify. This is not only a drain on the landlord’s finances, but can also lead to unhappy tenants who may choose to look for alternative accommodation if the disruption becomes too much to live with.

Buy-to-let interest rates on the up?

The cost of the average two-year fixed rate mortgage has risen since the start of October on the back of speculation that the Bank of England may hike the base rate.

A 0.05%-point increase since 1 October has taken the average two-year fix to 2.25% after 21 lenders upped their rates.

It comes after comments from Bank of England governor Mark Carney fuelled speculation of a base rate rise as early as November, pushing up the two-year swap rate from 0.54% to 0.82% in the space of a month. If this is to be the case landlords should review their current mortgage deal urgently as more increases will only hit profitability.

Skipton and Nationwide were among the first major lenders to raise their rates on 29th September, with Halifax following suit on 2nd October with increases of up to 0.2%.