Still falling but for how long?

Research shows that the average two-year fixed BTL mortgage rate has fallen by 0.35% in just one year, and even though the pace of the fall has slowed in recent months – the vast majority of that decrease took place last year.

The figures also show that the market has now recovered from the significant drop in products that was seen at the start of this year, suggesting that landlords can benefit not only from low rates, but also a higher number of mortgages to choose from. The choices have also increased in the limited company sector as well.

The BTL market has seen some turbulent times, with significant tax changes, tougher affordability rules, and still more changes to come. Yet, rates have continued on a downward spiral.

New regulation brought tighter affordability rules into play, effectively reducing the amount that landlords can borrow. This had a knock-on effect on availability, and indeed the pace of rate cuts, yet it seems that the market is recovering.

There are further changes to come, and providers are now starting to gear up for yet more regulatory intervention. From 30 September, lenders will have to apply stricter standards for landlords with four or more properties. Given that 89% of the mortgage deals on the market today are available for borrowers with four or more properties in their portfolio, these changes will affect a large chunk of the market.

Faced with these changes, it is likely that competition among providers may start to ebb initially, with the providers instead focusing on their core range and getting their criteria up to date.

Given the changes on the way, it makes a lot of sense to consider your options and make the most of the competition while you can. If your current mortgage is penalty free take time to review it now, this action could save you thousands in the future.

Can we help?

If you are looking for a new or wish to review your current mortgage please do make contact and one of our advisers will be happy to assist.