The cost of the majority of fixed rate buy to let mortgages look to have begun a drift upwards, a trend that was predicted after the Bank of England recently revised its forecasts for growth in the UK economy upwards.
It is thought that the Bank is positioning itself for more increases in the base rate than the financial markets had previously been forecasting, according to online broker Property Master.
Its June 2019 Mortgage Tracker shows that the monthly cost of five out of the six categories of fixed rate buy to let mortgages rising.
The monthly cost of five year fixed rate buy to let mortgage offers for 50% of the value of a property was up by £7 in June compared to the previous month of May.
Five year fixed rates for 65% of the value of a property increased month on month by £5 while five year fixed rates buy to let mortgage offers for 75% of the value of a property was the only one of six categories tracked to fall in monthly cost but then only by £1.
The three categories of two year fixed rate buy to let mortgages tracked all increased with the largest rise being £6 per month, according to the tracker which follows a range of buy to let mortgages for an interest only loan of £150,000.
Deals from 18 of some of the biggest lenders in the buy to let market including Barclays, BM Solutions, RBS, The Mortgage Works, Godiva and Precise were tracked and the figures for were calculated on deals available on 01 June 2019.
According to Angus Stewart, Property Master’s chief executive this is not being helped by continued Brexit uncertainty and the vote for a new Prime Minister.
‘There is some comfort for landlords facing increased rates in that competition amongst mortgage lenders for business has been fierce in recent years and that has fuelled the growth in the number of buy to let mortgage offerings to a 10 year high,’ he said.
‘There are an estimated more than 2,100 products to choose from but with lending criteria varying considerably between the operators landlords cannot assume that all of these possibilities are open to them,’ he added.
But he pointed out that increases in mortgage costs are particularly unwelcome in the current climate of rising regulatory costs with the new ban on lettings fees in England and deposits limited to five weeks putting further pressure on landlords.