28 Jan

New mortgage deals target buy-to-let market

New mortgage deals target buy-to-let market

A number of new mortgage products have been launched that could boost the affordability of buy-to-let investments in the UK property market.

Leeds Building Society has opted to reduce borrowing costs on its two-year fixed product, while Virgin Money, Accord and Santander have also made cuts on their rates on buy-to-let deals.

The latest buy-to-let index from LSL Property Services show that buy-to-let investors have seen average returns of 12.7 per cent over the past 12 months - accounting for rental income and capital gain.

However, this figure does not account for tax, maintenance costs or mortgage repayments and therefore a rise in the base rate of interest could have a significant impact on buy-to-let investors.

There has been a boom in the number of people buying property as an investment since the record lowering of the interest rate and a relaxation of affordability rules.

David Hollingworth, from mortgage broker London & Country Mortgages, explained: "They are not subject to the same kind of affordability checks for ordinary buyers."

"Lenders are also able to look at the property's rental income, as well as the borrower's salary, when making a decision about a buy-to-let mortgage."

He added: "Landlords are still in a healthy position, as the recent rate cuts show that the market is fiercely competitive. As a result, they benefit from rate cuts."ADNFCR-1222-ID-801772447-ADNFCR

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