A series of lenders have slashed their buy to let mortgage rates in a bid to win business.
These include:
- LendInvest Mortgages has reduced its buy to let rates by up to 0.80%. Along with specialist support for complex BTLs with up to £1.5m loans for large HMOs and Multi-Unit Freehold Blocks, the lenders says it aims to offer specialist support for portfolio and limited company landlords.
- CHL Mortgages has lowered fixed rates on its CHL 1 BTL product range by up to 0.65%. The product, launched last November, is for customers (individual and company) with a clean credit history and consists of standard BTL and Small HMO/MUFB product types.
- Kensington Mortgages says all its residential and buy to let mortgages, including limited company products, will include a minimum £250 cashback until the end of January. In addition, Kensington is lowering selected residential rates by up to 0.75%.
- Foundation Home Loans has launched a limited edition five-year fixed rate product. Available for both purchase and remortgage purposes, the BTL fixed rate comes with a headline rate of 5.64% up to 75% loan-to-value and a 1.50% fee. This follows the December repricing of selected products across its BTL range with rate reductions of up to 0.20%.
- Shawbrook has expanded its BTL offering with a new, limited edition five-year fixed rate product, available on loans from £150,000 to £25m, featuring a 0.50% reduction on the standard five-year fixed product up to 75% LTV, with rates starting from 6.09%.
"The mortgage market may be heating up, but this won't fully ease the pain for the roughly 1.6 million existing borrowers with cheap fixed rate deals expiring this year. They still face a heavy jump in interest payments when they switch onto a new product, with the only comfort that the situation could have been much worse" cautions Alice Haine, an analyst at Bestinvest.
Rate reductions by lenders in the BTL and home ownership sectors have fed through to the average rates, as calculated by independent mortgage market monitor Moneyfacts, which says the average two-year fixed rate and five-year fixed rate are at their lowest levels since June 2023.
Richard Fearon, chief executive at Leeds Building Society, told the BBC "this mortgage price war has become very visible this week. There is always a Christmas slowdown, but we've seen the market come back with a bang and it's really competitive. Rates are down one percentage point or so since their peak."
Savills’ Top Buy To Let and Resi Investment Tips for 2024
Savills has revealed the residential element of its annual cross-sector forecasts for investments in 2024 to 2028.
The agency says turbulence in the mortgage markets, an uncertain planning environment, increased build cost inflation and regulatory changes in the private rented sector, suppressed transactions and growth in the residential sector in 2023.
But with inflation heading back towards the Bank of England target of 2.0% and more stability in the mortgage markets, Savills expects to see the primary sources of financial disturbance ease back over the course of this year.
Despite tougher conditions for landlords, with Savills forecasting rents to grow by a further 18.1% by 2028 there is still significant opportunity for those less reliant on debt, particularly for those with a portfolio furthest from London, with Savills forecasting 9.2% returns for the North West.
But struggles in the private rented sector are also expected to spur on institutional landlords, and both Build to Rent and Purpose Built Student Accommodation are expected to play an increasingly important role looking forward, says Savills.
These are Savills residential themes and top pics for 2024:
· Even though costs of debt are expected to stay “higher for longer”, progressive cuts in the cost of mortgage debt over the next five years should open up capacity for a return to house price growth and an increase activity levels. Savills has forecast mainstream house prices to return to growth by 2025;
· Prices remain 19% below their 2014 peak in prime central London and is overdue a recovery. But such recovery will have to take place in a much tighter tax and regulatory environment than before, at a time when the current parliamentary opposition has non-doms tax status and overseas buyers stamp duty firmly on its radar;
· The prospect of a more widespread recovery in market conditions will come as welcome news to a housebuilding industry, which has been at the sharp end of the housing market downturn of the past year. Coinciding with the cessation of Help to Buy, substantial increase in build costs and a substantial shift in planning policy this has been a bruising experience;
· Buoyed by a burst of strong rental growth, larger equity-rich landlords have been much better placed to weather the storm, being able to take a more sanguine view on the impact of the end of the Assured Shorthold across a portfolio which diversifies tenant specific risks;
· But the benefits to developers of selling built-to-order units off-plan (post Help to Buy), looks more conducive to the process of assembling portfolios of energy-efficient, new-build residential homes than ever.
Top picks:
· Best in Class: Whenever a market is in the late stages of a downturn or the early stages of a recovery, it’s the properties that are Best in Class that perform most strongly. It’s a combination of location, situation, aesthetics and quality of accommodation. Difficult to describe but you know it when you see it;
· Retirement for rent: The emergence of new players and new models in the retirement housing sector, backed up by a structural imbalance in demand and supply underpins this year’s residential investment pic;
· Partnerships with an affordable twist: While delivering a new generation of new towns is a laudable aspiration, the timescales, trials and tribulations involved in bringing these into being suggest it remains one for the evangelists. With a shift in focus to the delivery of affordable homes in the event of a change in government, the agency expects to see more partnerships between developers and affordable housing providers, especially the new generation of 'for profits'.