Average rates for a buy-to-let mortgage have been on a downward slide in recent months, says Moneyfacts, hitting levels not seen since the start of the year.
Data released by the firm today shows that the average rate for a two-year fix at all LTVs is 2.95% currently, down from 3.05% in March 2021 and is the lowest rate seen since January 2021, when the rate came in at 2.89%.
And the average rate for a five-year fix across all LTVs is now 3.30%, which compares to 3.41% in March and the previous recent low of 3.27% in January.
For a two-year fix, rates have fallen since March at 75% LTV, 70% LTV and 65% LTV, but have increased at 80% LTV – from 4.14% in March to 4.20% today.
This pattern occurs within five-year fixes, too – here, the average rate at 80% LTV has increased from 4.29% to 4.35%.
The most significant rate reductions since March occur at 65% LTV for a two-year fix, where the rate has fallen from 2.89% to 2.68% and, within five-year fixes, at 70% LTV. Here, the rate has dropped from 3.44% in March to 3.28% today.
Moneyfacts finance expert Eleanor Williams says: “While it goes without saying that the last year has presented great challenges to many investors in the sector, the latest Lettings Index from Hamptons illustrated that rents have risen by 5.9% in Great Britain in April 2021, the fastest rate of growth it has recorded since January 2015.
“Hampton’s indicated that the rise in rental growth may well be linked to the fact that there were 45% fewer homes available for rent in April 2021 compared to April 2019.
“For investors contemplating an expansion into the BTL sector, demand from tenants is booming and while it remains difficult to earn a decent return on many forms of investment, it’s understandable why rental property could be a tempting option.”
Original Article from Mortgage Strategy 24/05/2021