A news item that caught our eye at Hogan’s this week – amongst the economic doom and gloom – was some good news about BTL mortgages.

Fleet Mortgages, a buy-to-let specialist, has launched five-year fixed-rate mortgages, available across its three core product ranges – standard, limited company and HMO/multi-unit block.

The interest rates for Buy to Let have generally been higher than for customers buying their own homes but these figures seem appealing:

  • 5.69% for standard and Ltd Company borrowers
  • 5.89% for HMO and multi-unit block borrowers

Each does come with a 5% fee though.

Fleet Mortgages chief commercial officer Steve Cox says:

“Affordability for buy-to-let borrowers remains a significant challenge in this higher rate environment so at Fleet we want to ensure we provide an array of product options which might help advisers and their clients to secure the finance they need.

“The launch of these new five-year 70% LTV fixed-rate products, which come with a lower rate and higher fee are designed to do just that, and from previous forays into this space, we know they are proving popular.”

According to Which? there are currently 2,297 BTL deals to choose from with a LTV stipulation of 80%. All of the best deals come with upfront fees, like with Fleet. There was much news last year about portfolio landlords leaving the BTL arena but mortgage firm Landbay recently revealed, from an extensive survey, that 70% of landlords are committed to the long term.

As well as higher mortgage rates, BTL landlords are seeing legislation changes.

  1. Renters’ Reform Bill is set to introduce a ban on no-fault evictions and double the notice periods required for rent increases.
  2. Meanwhile, the capital gains tax allowance, which applies to landlords selling a property, was reduced from £12,300 to £6,000 in April. It will then be lowered further to £3,000 next year – meaning the potential profitability of selling is slashed.
  3. There are new government plans for energy compliance too: with an Energy Performance Certificate (EPC) rating of at least C by 2028. Currently, many privately rented homes have an EPC rating below C.

But.

Rental demand remains sky high and rental costs are showing annual increases of 9.5% per annum. Outside London, the average rent reached a record amount of £1016 per month this year and there are little signs of this abating.

As with any investment, it is best to think long term and with Fleet offering attractive packages, the future for landlords may not be as dark as the media would have you believe.