Fingerprint Financial Planning regarding Coronavirus and the BTL market.

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It is great to connect with other businesses that have a similar mind set to ours. Here we have an important and helpful update from Fingerprint Financial Services that we have worked very closely with for many years and they have assisted so many of our clients to secure the right deal. They have such an amazing team there and are able to deal with anything that you would need help with. Let me know if you want someone to contact you and have a chat about what you could do with your portfolio, current mortgage, pension etc.

As the Coronavirus pandemic continues to impact the UK economy, it has also affected the buy-to-let (BTL) mortgage rates.

Despite two base rate cuts in March, the average rate on a 60% loan-to-value (LTV) two year BTL mortgage has increased from 1.92% in January to 2.39% today, while the average rate on a 60% LTV five year fixed BTL has increased from 2.32% to 2.76% during the same period.

Landlords looking for a two year fixed rate BTL deal on a 70% LTV will have seen rates fall since the beginning of the year, standing at 2.98% in January and falling to 2.78% today. During the same period, the average rate on a two year fixed rate BTL deal at 80% LTV fell slightly, from 3.64% to 3.61% today.

When the LTV goes over 80%, then there is a different story as these rates have increased since the beginning of the year, from 4.03% in January to 4.32% today. The average rate on a five year deal at 70% LTV, however, has also fallen since January, from 3.3% at the start of the year to 3.06% today.

Coronavirus pandemic impacts BTL mortgage market

It seems that the economic uncertainty caused by the Coronavirus pandemic has resulted in some BTL mortgage rates rising. For example, up until March, average rates on 60%, 70% and 80% on both two and five year fixed deals had been constantly falling, but April saw a significant increase in rates on two and five year 80% and 60% LTVs. Between March and April, 60% LTVs saw the biggest increase on both terms, with the average two year rate increasing by 0.35% (from 1.89% to 2.24%) and the average five year rate increasing by 0.31% (from 2.31% to 2.62%).

The average rates on 70% LTVs, however, continued to fall between March and April, with the average two year fixed rate at 70% LTV falling by 0.12% (from 2.91 to 2.79) during this period and the average five year rate at 70% LTV falling by 0.18% (from 3.21% to 3.03%).

Fall in BTL mortgage products

One reason why rates may have fallen on 70% LTV deals on two and five year fixed terms is due to the fact that the number of products available have also fallen during this time period, which has resulted in an overall drop in average rates. For example, the number of two year BTL deals available on a 70% LTV fell by 45, from 132 on the 1 March to 87 on the 1 April, while the number of five year BTL deals fell by 38, from 115 to 77. Two and five year deals at 80% LTV also fell significantly from March to April, with the number of two year BTL deals at 80% falling by 84, from 141 to 57 and the number of five year deals falling by 81, from 150 to 69.

While lenders have been withdrawing deals at higher LTVs, the number of BTL deals at 60% LTV has increased between March and April. From the 1 March to the 1 April, the number of BTL two year deals at 60% had increased by five, from 124 to 129, and the number of 60% BTL five year deals increased by seven, from 133 to 140.

Getting BTL mortgage valuations

The fact that no physical valuations or inspections are able to take place at the moment has had a major impact on the letting market, however with many BTL mortgage lenders offering an automated valuation model (AVM), landlords are able to apply for mortgages and remortgages. Currently, houses in multiple occupation (HMOs) and non-standard properties do not qualify for automated valuations, but it is available for landlords needing valuations on standard properties.

BTL mortgage lenders currently offering AVM

Accord                

Aldermore                          

Barclays                                

BM Solutions     

Clydesdale                            Remortgages only

Family Building Society  

Gatehouse         

Godiva                                   Remortgages only

Leeds                  

Paragon               

Principality          

Shawbrook         

Skipton                

TMW     

Virgin                                     Remortgages  only

To contact Fingerprint Financial Planning follow the link below:

https://www.facebook.com/FingerprintFinancialPlanning/

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