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Buy to Let Market Seeing Reductions – And it’s Just the Start
The buy-to-let mortgage market is seeing rates fall in light of the Bank of England reducing its base interest rate to 4%. Lenders are reducing rates to stay competitive - which could benefit property investors.
Here's a snapshot of the best buy-to-let mortgage rates on the market today (switch to the buy to let tab):
Landlord Sentiment: Surge in Plans to Expand Portfolios
New research from Landbay also reveals a sharp increase in landlord confidence and investment appetite. More than half (52%) of buy-to-let landlords intend to purchase new properties in the next 12 months, a significant rise from 27% following the Autumn Budget.
On average, landlords plan to buy three more rental properties, with some aiming to purchase as many as 10 properties this year.
The strongest intention to buy comes from non-portfolio landlords with fewer than four mortgaged properties, nearly a quarter of whom plan to expand. Larger landlords with 16–30 properties also show strong interest, with 22% intending to grow their portfolios.
Regional trends show that the South East leads in buying intentions, followed by London and the North West.
The research also highlighted that 64% of landlords will factor in the stamp duty increase during negotiations, and just over half (52%) intend to buy properties requiring little or no modification to meet future EPC rules.
Find the Perfect Buy-to-Let Mortgage
In response to the ongoing challenges faced by buy-to-let investors, many landlords are weighing the benefits of holding properties within limited company structures. It has become increasingly difficult to turn a profit in the rental sector, particularly since the introduction of 'Section 24', which prevented buy-to-let investors from deducting fees and interest from their rental income.
This shift is driven by the tax efficiencies offered to landlords who hold properties within companies. Rental income is subject to corporation tax, which is typically lower than personal income tax. While mortgage interest is no longer fully deductible for individual landlords, it remains deductible for companies, allowing for greater profitability.
However, higher mortgage rates are still testing landlords' resolve. UK Finance reports that the number of landlords in mortgage arrears has doubled over the past year, from 5,760 to 11,540.
Despite this, the renewed appetite for expansion suggests a shift in sentiment, supported by falling mortgage rates and competitive products from specialist lenders.
Landlords nearing the end of their fixed-term deals may also benefit from the recent rate cuts, as lenders continue to reduce rates to entice new business.
Are You Looking to Invest in a Buy to Let?
We can help. At Clifton Private Finance, we have relationships with high street, private and specialist lenders across the industry. Our dedicated team of mortgage brokers can offer you tailored advice on your options and guide you through the mortgage process.
Working with a broker can ensure you have access to the best deal for your circumstances, including market-leading rates and bespoke finance solutions. We have expertise working with complex circumstances, such as income structures, foreign currency earnings, and asset portfolios.
Where appropriate, our team can take a holistic view of your wealth and put you in contact with the most suitable lender.
We offer creative solutions for landlords who wish to purchase or remortgage buy to let properties. Call our buy to let team on 0117 332 5491 to discuss your requirements, or book a call-back below.
