Buy-To-Let Rates Rise

The Telegraph reports that figures from Mortgage for Business, the specialist broker, show average fixed-rate deals reversed the rate cuts made in March.

The average two-year fixed term loan was 2.9pc in April, up from 2.86pc in March. Three-year deals rose from 3.53pc to 3.56pc, while the average five-year buy-to-let mortgage went from 3.74pc to 3.76pc.

It is the first time buy-to-let rates have increased this year, and the first time three-year fixed mortgages have risen since April 2016.

However, the average tracker mortgage fell, from 4.85pc to 4.74pc in April.

It would appear that mortgage providers are using the increases in buy-to-let rates to offset reductions in rates offered to residential customers.

Bank of England Kiboshes Buy To Lets

The Bank of England is doing its best to put the kibosh on the buy to let market.

The FT reports that the Bank is tightening lending rules. New measures to restrain the market include subjecting loans to a stress-test scenario whereby mortgage rates rise to 5.5% and more stringent affordability tests which take into account the borrowers’ costs of letting out the property – including tax liabilities.

All very well and dandy, but realistically in the extremely unlikely event that rates rise to 5.5% in the next few years, any buy to let landlord who couldn't meet the payments would simply dump the property.