There has been a sharp rise in the cost of buy to let mortgages since the November 2 announcement increasing the Bank of England base rate.
Independent mortgage market monitor Moneyfacts says the average two-year tracker buy to let mortgage rate has risen by 0.2 per cent to stand at 2.43 per cent, above 2016’s figure.
“Rates have turned around from the record low of 2.23% in November with the largest monthly rise that has ever been seen on Moneyfacts’ records” according to the service’s finance expert Charlotte Nelson.
“Not only has the average variable tracker rate increased, so too has the average two-year fixed rate, seeing rates bound upwards and nearing June 2017 levels with the highest monthly rise since April 2015” she adds.
Nelson also warns that the criteria changes for portfolio landlords – those with four or more buy to let properties – and the rising fixed and variable tracker rates will start to eat into the returns of landlords, making many consider whether buy to let is still the right option for them.
“Given that savings rates remain low, property is still seen as a good option by many and the lure of a higher return will continue to see many potential landlords wanting to dip their toe into the buy to let waters. As rates keep rising on BTL deals, borrowers will need to act fast if they still want to get a low rate. Anyone who is unsure should seek the advice of a financial adviser” she concludes.