Rates plummet on buy-to-let deals
Buy-to-let providers have slashed rates over the last five years, according to research from Moneyfacts, despite a slew of changes forced on the sector.
The financial information provider said that two-year fixed rates for landlords have fallen from 5.21% in Aptil 2011 to 3.32% today, with five-year deals having dropped from 6.24% to 4% over the same period.
It also noted that rates have dropped considerably in the last two years alone. Charlotte Nelson, Moneyfacts’ spokesperson, said: “The buy-to-let market has faced intense pressure recently, but despite this, rates have continued to fall across all fixed rates. 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.
“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.”
“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.”