British buy to let landlords have had one of the most lucrative years to date, with recent equity gains allowing them to negotiate better mortgage deals. In fact, according to the latest statistics from the Mortgage Advice Bureau’s Mortgage Search Tracker buy-to-let deposits have increased by 15% over the past 12 months. This bought the national average up to £100,000. The results are better deals for buy-to-let landlords, increased income and the opportunity to expand portfolios.
Higher cash deposits translate to better interest rates
Thanks to increased equity and higher cash deposits, the Mortgage Advice Bureau maintains that buy-to-let landlords are now able to negotiate better interest rates. With average loan to value rates falling from 62.2% to 56.5% buy-to-let mortgages offer lenders more financial security.
Brian Murphy, head of lending at Mortgage Advice Bureau explains, “Landlords are in an especially strong position to use their recent equity gains to negotiate a better mortgage deal. House prices have settled into a steadier pattern in recent months, but the current low rate environment offers many buy-to-let borrowers the chance to reassess their finances.”
Buy-to-let landlords seek shorter mortgages
The Mortgage Advice Bureau has also revealed interesting information regarding the length of mortgages sought out by buy-to-let landlords. While 12 months ago saw 62% of buy-to-let landlords signing up for 25 year terms, today just 52% of investors settle for quarter decade contracts. Meanwhile, applications for 15 – 24 year loans have risen from 29% in 2013’s last quarter to 41% in 2014’s last quarter.
At the more extreme end of the scale some mortgage companies have been reporting a sharp rise in the number of buy-to-let landlords signing up for ultra-short two year fixed rate mortgages.
“Tempted by cheap rates, landlords are deciding to take their chances with a shorter term deal,” explains David Whittaker, managing director at Mortgages for Business.
With access to higher cash deposits, better interest rates and shorter mortgage terms the future is definitely looking bright for buy-to-let landlords. Of course, all investors should be sure to protect their savings by taking out comprehensive landlord insurance for every property in their portfolio. This will eliminate the risk of any mortgage and interest savings being cancelling out by unexpected incidents. The best place to source deals is form online quote compare websites that trawl the web for all the latest offers. It’s simple, easy and guaranteed to generate weighty savings.