Posts with tag: buy to let mortgages

Buy-to-let mortgage sales fell in March

Published On: April 21, 2016 at 9:03 am

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Interesting new data has indicated that there was actually a fall in buy-to-let mortgage sales in March. This is surprising given the expected rush of business to beat the additional stamp duty deadline.

Research from Equifax Touchstone suggests there was a decline of 26.2% in buy-to-let mortgages during March.

Sales

The report also showed that residential sales were up by 1.4% from February to hit £12.95bn. These were the greatest monthly sales figures since the financial crash in 2008.

However, combined residential and buy-to-let sales in the intermediated market fell by 5.1%, or £855.7m from the previous month.

By region, Scotland was the only area to see an increase in sales in March. Northern Ireland saw the sharpest drop, with sales down by nearly 20%. London saw falls of almost 10% month-on-month.

In addition, data from the report also showed the average value of a residential mortgage was £190,091 and £157,819 for buy-to-let let. These figures were up from the £179,187 and £157,819 respectively, as seen in March.

Buy-to-let mortgage sales fell in March

Buy-to-let mortgage sales fell in March

Taking advice

Iain Hill, Relationship Manager of Equifax Touchstone, noted, ‘recent buy-to-let mortgage flows indicate that borrowers took the advice of their lenders and initiated transactions in good time to avoid an eleventh-hour panic.’[1]

‘The big question from here is, to what extent will the new stamp duty rates discourage investors from entering into new deals? With so much economic uncertainty, property remains an attractive investment option for many people. Given the rollercoaster first quarter of 2016, it will be interesting to see where sales trends go from here,’ Hill added.[1]

[1] http://www.propertyreporter.co.uk/finance/btl-sales-dr0p-%C3%A3%C2%A21bn-in-march.html

 

BTL mortgage rates cut to boost market

Published On: April 15, 2016 at 11:35 am

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Categories: Landlord News

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Mortgage lenders are cutting rates on products intended for buy-to-let landlords in a bid to give the market a boost in the wake of the stamp duty deadline passing.

Cuts

Comparison website Moneyfacts says that the average two-year fixed buy-to-let mortgage rate currently stands at 3.32%. This is down on the 3.59% recorded at the same time last year and substantially lower than the 4.03% average shown in April 2014.

The average five-year fixed rate deal for buy-to-let landlords is presently 4.0%, in comparison to 4.37% in April 2015 and 4.76% two years ago.

Charlotte Nelson, a spokeswoman for Moneyfacts, said, ‘while the new tax rules and stamp duty changes could potentially take the shine off buy-to-let investment, property is often seen as a safe bet and with rental properties in demand and rent high, buy-to-let remains an attractive proposition.’[1]

‘A year on from pension freedoms, almost £3bn has been paid out in cash lump sum withdrawals, so it’s highly likely that some of this money has been accessed with buy-to-let in mind,’ she added.[1]

BTL mortgage rates cut to boost market

BTL mortgage rates cut to boost market

Downwards

Analysts from Moneyfacts have noted that savings rates are so low that many retirees investing in buy-to-let following changes to pension rules are starting to look elsewhere. A separate investigation underlines how the majority of retiree landlords are dependent on their rental income.

Lenders are keen to avoid this group of investors to consider their options, therefore are offering some of the best rates the sector has witnessed. What’s more, rates were already low in the run up to the stamp duty changes, which has further aided the downward spiral of rents.

Concluding, Nelson said, ‘while the current pressures on the market are not yet causing rates to rise, borrowers should remember that they will now be facing tighter lending rules, including stricter affordability checks, so it is even more important for potential to seek financial advice to see if buy to let really is the right option for them.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/4/lenders-try-to-bolster-flagging-buy-to-let-market

Buy-to-let mortgage products rise in Q1

Published On: April 15, 2016 at 8:51 am

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The total number of buy-to-let mortgage products available in Britain rose substantially in the first three months of 2016.

Data from the latest Mortgage for Business index reveals that residential landlords with a limited company were particularly spoilt for choice.

Increases

An increase in product numbers aimed at limited company mortgage seekers saw the total of buy-to-let mortgages rise from 963 in Q4 of 2015 to 1,105 in the opening quarter of this year.

In addition, figures from the report show that remortgages outstripped purchases for all property types, except HMO’s, where purchase numbers were marginally higher.

Unsurprising

David Whittaker, managing director of Mortgages for Business, noted, ‘with tenants looking for less expensive accommodation and landlords looking for higher yields it is no surprise that the number of HMO purchases has risen in the last quarter.’[1]

‘Even though remortgage transactions were higher this is not to say purchase numbers were down,’ Whittaker continued. ‘All types of residential investment showed a marked increase in the number of purchase transactions as investors rushed to beat the 3% stamp duty surcharge deadline.’[1]

Buy-to-let mortgage products rise in Q1

Buy-to-let mortgage products rise in Q1

The Index also shows that rental yields for semi commercial property also increased in the opening quarter of 2016. This made it the second biggest yielding property category.

Mr Whittaker forecasts that the number of buy-to-let landlords buying semi-commercial property will rise in the upcoming months. He believes this is due to the fact mixed-use properties are classed as commercial premises and will not be subject to the increases in Stamp Duty surcharges.

[1] http://www.propertywire.com/news/europe/uk-buy-let-mortgages-2016041411796.html

Bank of England Expects Buy-to-Let Mortgage Lending to Drop Sharply

Published On: April 14, 2016 at 8:31 am

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Activity in the buy-to-let mortgage sector is expected to drop sharply in the coming months, according to a survey by the Bank of England (BoE).

The BoE’s Credit Conditions Survey, which records the predictions of UK banks and building societies, found that lending to owner-occupiers is likely to increase significantly in the second quarter (Q2) of this year, but the opposite will happen for buy-to-let landlords.

The survey’s results arrive as the Council of Mortgage Lenders (CML) reports that £3.7 billion was lent to landlords in February, a huge 61% rise on the same month last year.

The CML claims there were 48,000 loans approved for house purchase in February – consisting of 22,000 loans for first time buyers and 26,000 for home movers. It also found there were 10,300 buy-to-let loans for house purchase.

Bank of England Expects Buy-to-Let Mortgage Lending to Drop Sharply

Bank of England Expects Buy-to-Let Mortgage Lending to Drop Sharply

All of these figures are up on the previous month and significantly higher than the previous year, with 11.1% more loans to first time buyers and 13.5% more for home movers.

The Director General of the CML, Paul Smee, comments: “Activity has been boosted by landlords seeking to complete purchases before tax changes in April. We do not expect activity to show such strong year-on-year growth later in the year.”1 

However, some analysts believe that there may be too much pessimism regarding the sector.

The Director of mortgage broker Anderson Harris, Jonathan Harris, says: “Buy-to-let goes from strength to strength, but of course, figures will be skewed by landlords bringing forward purchases to beat the Stamp Duty deadline.

“It is highly likely that purchase numbers will slip, although we expect remortgaging to continue to thrive, as landlords squeeze every penny out of investments to help cover other tax changes, such as the reduction in mortgage interest tax relief.”1

Despite the forthcoming changes, Paul Mahoney, a finance expert at Nova Financial, insists that “buy-to-let is not dead”, and explains how the changes will affect you: /contrary-to-popular-belief-buy-to-let-is-not-dead-insists-finance-firm/

Yesterday, we reported that the number of people showing interest in buy-to-let property fell by over a quarter in March compared with the previous month.

New data from e.surv also suggests that mortgage lending dipped over the past month, as buy-to-let activity eased. However, it was still the strongest Q1 for mortgage approvals since 2007.

The firm estimates that there were 67,173 house purchase loan approvals in March, down by 9.1% on February. It believes that first time buyer mortgages accounted for 11,487 of these loans.

For the first three months of the year, e.surv calculates a total of 210,468 house purchase loan approvals, up 13.5% on Q1 2015.

1 https://www.lettingagenttoday.co.uk/breaking-news/2016/4/the-surge-is-over-bank-of-england-says-buy-to-let-lending-about-to-plummet

Buy-to-Let Mortgage Rates Drop to Record Lows

Published On: April 12, 2016 at 12:04 pm

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Buy-to-let mortgage rates have dropped to record lows, according to data from comparison website Moneyfacts.

After learning that they will be hit with a reduction in mortgage interest tax relief and higher Stamp Duty, landlords have finally received some good news.

Figures from Moneyfacts show that mortgage lenders are cutting their rates significantly in order to encourage landlords to continue to invest in the buy-to-let sector, despite the changes.

Indeed, buy-to-let mortgage rates have been continuously decreasing over the past five years, with the fixed rate sector experiencing notable reductions. The table below shows the average rate changes across the market:

[table id=5 /]

Charlotte Nelson, a finance expert at Moneyfacts, explains the changes in the sector: “The buy-to-let market has faced intense pressure recently, but despite this, rates have continued to fall across all fixed sectors. For example, the average two-year fixed rate has fallen by 0.71% in just two years, while the average five-year fixed rate has dropped by an equally significant 0.76% over the same period.

Buy-to-Let Mortgage Rates Drop to Record Lows

Buy-to-Let Mortgage Rates Drop to Record Lows

“While the new rules and Stamp Duty changes could potentially take the shine off buy-to-let investment, property is often seen as a safe bet, and with rental properties in demand and rent high, buy-to-let remains an attractive proposition.”

Nelson also suggests that pensioners are boosting the buy-to-let sector, as many take advantage of the new freedom rules introduced in April last year. During the past 12 months, almost £3 billion has been paid out in cash lump sum withdrawals, according to the Association of British Insurers.

Nelson believes it is “highly likely that some of this money has been accessed with buy-to-let in mind.”

She continues: “Savings rates are currently so poor that many are looking elsewhere to fund their retirement, so lenders have tried to capitalise on this new pool of cash by offering some of the best rates the buy-to-let sector has ever seen.

“In addition, providers also cut rates in the run-up to the Stamp Duty changes in order to attract those keen to buy before they were implemented, which has further aided the downward slide in rates. However, while the current pressures on the market are not yet causing rates to rise, borrowers should remember that they will now be facing tighter lending rules, including stricter affordability checks, so it is even more important for potential landlords to seek financial advice to see if buy-to-let really is the right option for them.”1

Despite many changes affecting the buy-to-let sector, including stricter affordability checks as a result of the European Union’s Mortgage Credit Directive, Nova Financial’s Paul Mahoney insists that buy-to-let “is not dead”, and explains how the forthcoming changes will impact your lettings business: /contrary-to-popular-belief-buy-to-let-is-not-dead-insists-finance-firm/

1 http://moneyfacts.co.uk/news/buy-to-let/buy-to-let-providers-slash-mortgage-rates/

Virgin Money updates buy-to-let mortgage range

Published On: March 31, 2016 at 9:23 am

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Categories: Finance News

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Today has started with Virgin Money announcing rate cuts throughout its core residential and buy-to-let mortgage range.

In addition, the lender has also raised cashback on buy-to-let intermediary exclusives, from £500 to £750, but only for a limited period. However, cashback totalling £1,500 remains available on all buy-to-let Stamp Duty Buster products.

New range

Intermediary exclusive products are able to be taken out through all intermediaries registered with Virgin Money.

Some key changes to the buy-to-let product range include:

  • Three-year fixed rate at 75% LTV, available at 3.74%-£995 product fee, £500 cashback
  • Five-year fixed rate at 75% LTV, available at 3.69%-£1,995 product fee. £500 cashback
  • Five-year fixed rate at 75% LTV, available at 3.79%-£995 product fee, £500 cashback
Virgin Money updates buy-to-let mortgage range

Virgin Money updates buy-to-let mortgage range

Enhancements

Peter Rogerson, Commercial Director for Mortgages at Virgin Money, noted, ‘these latest enhancements to our mortgage range demonstrate our continuing support to both residential borrowers and landlords. We have recently been named as best buy-to-let provider in the Moneyfacts Business Awards and to celebrate this success we are reintroducing £750 cashback on buy-to-let intermediary exclusives for a limited period only.’[1]

[1] http://www.propertyreporter.co.uk/finance/btl-rates-upd4ted-at-virgin.html