In it for the long haul

Not only are property investors still struggling to get to grips with the new landscape in which they operate, but they’re also being greeted with news stories like that which broke earlier this week about Conservative think tank ‘Onward’ which has called for an end to all buy-to-let tax breaks, regardless of income.

However, there is some good news for landlords that your buy-to-let clients will no doubt be pleased to hear and that is the emergence of competitive long-term fixed rates. A host of lenders are coming to market with competitive five- and ten-year fixes in yet further evidence that lenders are doing all they can to help landlords to navigate the current market.

Last month TMW brought out a ten-year fixed rate buy-to-let product at 3.49%, which includes free standard valuation, £250 cashback and no arrangement fee.

The Nationwide subsidiary also launched its first ever sub-2% five-year fixed rate buy-to-let mortgage deal early this year. The product has a rate of 1.99% and is available to investors with a 50% deposit, subject to a £1,995 fee.

Principality and Virgin Money both have impressive five-year products on offer with rates of 2.55% rate and 2.64% respectively.

Meanwhile Santander has an exclusive five-year fixed buy-to-let product available for purchases and remortgages at a rate of just 2.54% (available through Buy to Let Club). The product features interest cover ratios of 130% @ 4.5% for lower rate taxpayers, 145% @ 4.5% for higher rate taxpayers and 125% @ 4.5% for like-for-like remortgages (subject to certain criteria).

Aside from the security long-term fixes offer (and, let’s face it, security is something we could all do with right now!), five-year-plus fixed rates have other benefits too. Most notably many longer term fixes feature more attractive rental calculations, which can help with the refinancing of low-yielding properties.

Landlords are certainly seeing the benefits. Indeed, our research found that the proportion of landlord customers opting for five-year fixed rates has jumped to 42%, compared to just 15% two years ago, before the Prudential Regulation Authority’s stress-testing changes were implemented.

Clearly, being in it for the long haul pays.