News: Buy-to-Let Rates on the Rise Again
Buy-to-let mortgage rates have risen in April, the first time they have done so since January, signalling an end to the period of reductions. The rise of the rates has affected two-, three-, and five-year terms and so far, only five-year fixed rates have failed to return to their February averages.
From March to April, fixed-term mortgages saw a 0.04% rise for two-year rates, 0.03% rise for three-year rates, and 0.02% rise for five-year fixed-term rates. This rise is a sharp contrast to the previous financial year, which saw three-year fixed-term rates fall on average from 4.5% to 3.53% between April 2016 and March 2017.
There is no doubt that this period of reduction – which saw rates drop to record lows – was in response to recent tax changes for the buy-to-let sector, along with the increased stamp duty that came into action this year. But, despite the efforts of lenders to maintain lending volume by reducing rates, the figures from April suggest that those rates could only fall until a certain point, and that limit seems to have now been reached.
However, it is important to note that despite what the headlines are saying, this news may be somewhat misleading as only fixed-term mortgage rates are rising. Tracker rates, on the other hand, saw a mixture of rises and drops in rates this April (depending on the length of the term).
News of the rise in fixed-term rates will no doubt affect landlords, who will also be feeling the effects of the changes to tax relief that began to be phased in at start of the 2017/2018 financial year.
Things to Consider if You Are Thinking of Investing
Understanding your lending options is essential if you are considering investing in a property. Flexible lending options in the form of bridging loans and development finance give you access to large sums of money over a short timescale, letting you complete your purchase smoothly.
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