The Times - The banks still love buy-to-let investors

by Aaron Strutt

Nov 01 2014

Things are looking up for landlords. Not only are mortgage rates becoming more competitive but arrangement fees are becoming cheaper and some lenders are offering cashback deals to encourage landlords to switch to better rates.

The cheapest deals are usually around 60-65 per cent LTV. Virgin Money, for example, has a particualry low two-year tracker rate. The arrangement fee is £995 and the minimum deposit is 40 per cent. Aaron Strutt, of Trinity Financial, a broker, says: “This deal highlights how cheap loans are getting.”

Arrangement fees are lower than they used to be too. Unlike residential mortgages, which typically cost from £99 to £1,000, fees for buy-to-let loans are usually worked out as a percentage of the loan, with 2.5 per cent being the average. Mr Strutt says: “Two-and-a- half per cent is quite a lot of money and is off-putting for some people. Lenders are moving away from 2.5 per cent, which is making mortgages seem more appealing to landlords.”

Retirees taking money from their pension pots to buy rental property now have more options. Mr Strutt says: “Most big lenders are not raising the upper age limit for borrowers planning to buy investment properties — if anything, acceptance policies are getting tighter. However, some smaller building societies are more open to lending and have helped clients who have been refused by the high street lenders.”