The cost of 5-year fixed buy-to-let mortgages has resumed a downward trend, Property Master’s January 2020 Mortgage Tracker has found.
The biggest month-on-month fall in cost was for 5-year fixed rate buy-to-let mortgage offers for 50% of the value of a property, falling by £15 from December to January.
Angus Stewart, chief executive at Property Master, said: “We did detect the buy-to-let market, as with many other sectors, was holding its breath until the election was out of the way.
“Now with such a clear, decisive victory we would expect confidence to return and our latest research has shown that this is being seen in a fall in the cost of borrowing.
“Most of this downward pressure on mortgage rates is though from greater competition amongst lenders for good business.
“A lower Bank of England base rate – which may now be on the cards – would give lenders scope to cut more deeply.
“Balancing out the good news of lower borrowing costs though there is for 2020 a list of tax and regulatory changes that will hit landlord profits.
“The traditional tax relief on mortgage interest will finally be phased out in April 2020 whilst those landlords that are renting out their own home will find from this year, they will be subject to full Capital Gains Tax when they come to sell.
“Meanwhile landlords will have to ensure their properties meet Minimum Energy Efficiency Standards to a new level this year and the ban on tenancy fees will be extended to all existing tenancies.
“Any reduction in borrowing costs will therefore be very welcome indeed.”
In regards to 5-year fixed rate offers for 65% of the value of the property, cost fell month-on-month by £11 while 5-year fixed rate offers for 75% of the value saw a monthly decrease of £3.
Meanwhile 2-year fixed rate buy-to-let mortgage offers for 65% and for 75% of the value of a property fell by £3 per month each from December to January.
By Michael Lloyd
Source: Mortgage Introducer