At last, there is the chance of some good news for landlords as rates for buy-to-let mortgages have fallen to record lows, according to comparison website Moneyfacts.
The average two-year fixed rate buy-to-let mortgage has fallen from 5.21% way back in April 2011 to 3.32% this month while the average five-year fix has fallen from 6.24% in 2011 to 4% today.
It has been suggested by Moneyfacts that pensioners digging into their retirement pots since new freedom rules in April 2015 could help boost the buy-to-let sector, thus keep lettings agents busy.
They went on to say that ‘A year on from pension freedoms and 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.
“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.”
Steve Povall, Managing Director of Residential Estates ‘it is still not all over for landlords, for a start there are stricter affordability checks as a result of the European Union’s mortgage credit directive’.