Buy-to-Let and commercial property mortgage brokers, Mortgages for Business, have released new figures showing that the current mortgage market is flooded with over 817 different products available to Buy-to-Let landlords. That is an increase of 16 percent month-on-month.
The figures also revealed that landlords with higher Loan to Value (LTV) loans were facing extra fees whilst those with low loan to value ratios were benefiting from smaller fees and the lowest mortgage rates. David Whittaker, managing director at Mortgages for Business, commented;
“Looking at total lending in 2014 the trend is clear. For a second consecutive year the value of the buy to let market grew by almost a quarter. We anticipate further growth in 2015 but at a slower rate as the market takes an inevitable breather after such a huge sustained spurt,” Whittaker added.
The research suggests there is better value available to landlords who are in a position to take advantage of smaller and shorter LTV mortgages, which are now offering more value than tracker mortgages in some cases. This is especially true of mortgages spanning 2, 3 and 5 years. For example, 2 year mortgage borrowers are currently paying 4.4 per cent as opposed to 4.7 per cent in its tracker equivalent.
Furthermore, the historically low interests rates set by the Bank of England seem to be encouraging more landlords to avail of lengthy mortgages, with only 1 per cent of landlords opting for a one year borrowing term. There has also been a decline in the number of landlords applying for mortgages for other short term borrowing periods with two year mortgages down to 52 percent in the latter half of 2014, a decrease of 5 percent in the previous 6 months. With lending conditions so favourable towards buy-to-let investors, Whittaker cautioned that it is inevitable that rates would eventually rise and that 2016 would not necessarily see such value in the buy-to-let mortgage market.