{"id":6029666,"date":"2020-02-19T13:15:30","date_gmt":"2020-02-19T13:15:30","guid":{"rendered":"https:\/\/www.buyassociation.co.uk\/?p=6029666"},"modified":"2023-11-07T13:11:37","modified_gmt":"2023-11-07T12:11:37","slug":"landlords-choose-flexibility-as-2-year-fixes-make-a-comeback","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-gb\/news\/landlords-choose-flexibility-as-2-year-fixes-make-a-comeback\/","title":{"rendered":"Landlords choose flexibility as 2-year fixes make a comeback"},"content":{"rendered":"

Flexibility was vital for landlords securing new buy-to-let (BTL) mortgages and remortgages at the end of 2019, according to the latest research.<\/strong><\/p>\n

The number of buy-to-let landlords<\/a> choosing a two-year fixed rate jumped from just 8% in the final quarter of 2018, to a substantial 26% in the same period of last year.<\/p>\n

Landlords were seeking shorter early repayment charge (ERC) periods, according to the Mortgages for Business (MfB) Buy-to-Let Mortgage Index, which enables them to refinance sooner without incurring a penalty. Political uncertainty<\/a> was most likely the driving factor, as the UK awaited the results of the December general election.<\/p>\n

Despite the surge in two-year fixes, the five-year fixed-rate mortgage remained the most popular choice for landlords, making up 68% of completions in the final quarter of 2019. But the market did look lively as trackers and discounted rate products saw a marginal increase in popularity, most likely due to the speculation of a reduction in the Bank of England base rate<\/a>.<\/p>\n

Managing director of Mortgages for Business, Steve Olejnik, said: \u201cGiven we now have more certainty in the political system, we forecast that landlords may start to look at longer-term fixes again in the future.\u201d<\/p><\/blockquote>\n

Lenders support the market<\/h4>\n

Current reports suggest that thousands of landlords are planning to sell up ahead of the new tax year due to the increased tax burden<\/a>; so the onus is on lenders to help make the sums for buy-to-let add up.<\/p>\n

The good news is that the number of buy-to-let products<\/a> available has seen a massive increase from 72 to 1,981, and those available to limited companies<\/a> up from 51 to 738, giving landlords plenty of choice.<\/p>\n

Plus, borrowers looking for longer-term fixes can still benefit from lenders’ less rigorous stress tests compared to shorter-term products, meaning they can borrow more than with a shorter-term product.<\/p>\n

Olejnik added: \u201cMore landlords are expanding their portfolios<\/a> through a limited company which has proven to be a more effective borrowing vehicle both from a tax perspective and financially. Lenders have responded to that and demand has fuelled an increase in the number of products available.\u201d<\/p><\/blockquote>\n

There\u2019s no doubt that the buy-to-let sector is undergoing severe change, but as Marc von Grundherr, of letting agents Benham and Reeves, says: \u201cThere’s always going to be very strong demand for rental property. Rental yields<\/a> are still going up and so while there have been changes, those who stay in buy-to-let or are brave enough to enter it can do well.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Flexibility was vital for landlords securing new buy-to-let (BTL) mortgages and remortgages at the end of 2019, according to the latest research. The number of buy-to-let landlords choosing a two-year fixed rate jumped from just 8% in the final quarter of 2018, to a substantial 26% in the same period of last year. Landlords were… Read more »<\/a><\/p>\n","protected":false},"author":3380,"featured_media":8443,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[2,26],"tags":[412],"class_list":["post-6029666","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buy-to-let-landlords","category-tax-mortgages-money","tag-buy-to-let-mortgages"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6029666","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/users\/3380"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/comments?post=6029666"}],"version-history":[{"count":1,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6029666\/revisions"}],"predecessor-version":[{"id":6098251,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6029666\/revisions\/6098251"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media\/8443"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media?parent=6029666"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/categories?post=6029666"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/tags?post=6029666"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}