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The Mortgage Works drops buy-to-let rates by up to 0.95%

Journalist: Newspage News Desk

ended 06. August 2023

On Friday afternoon, The Mortgage Works announced that, from Saturday 5 August, it would be reducing fixed rates across its new business range by up to 0.95%. You can see the full changes >> here <<.

Daniel Clinton, Head of Specialist Lending at The Mortgage Works, said: “Following the rate reductions for our existing customers last week, we're continuing to demonstrate our commitment to landlords with significant rate reductions for new lending. As well as offering competitive rates that help landlords manage their cashflow, these reductions will help ease affordability pressures with some landlords being able to increase borrowing by 10%.”

Brokers welcomed the move, with one, Lewis Shaw, owner of Mansfield-based Shaw Financial Services, saying “it will be a welcome shot in the arm for landlords”, while another, Ben Tadd, director at Chippenham-based broker, Lucra Mortgages, said the move “could signal a significant milestone in the start of rate reductions in the buy-to-let market”.

Jamie Lennox, director at Norwich-based mortgage broker, Dimora Mortgages, suggested it may even see some landlords who were previously considering exiting the sector stay after all: “It's great to see buy-to-let lenders reduce rates and landlords around the country who were considering selling up may breathe a sigh of relief.”

Riz Malik, director of Southend-on-Sea-based independent mortgage broker, R3 Mortgages, echoed Lennox's positivity: “If other companies decide to emulate The Mortgage Works' approach, it could provide new opportunities for landlords who previously felt stuck without options. I'm optimistic that the upcoming weeks will bode well for the mortgage market, especially if the inflation data set to be released on the 16th paints a favourable picture.” 

Meanwhile, Kundan Bhaduri, director of London-based property developer and portfolio landlord, The Kushman Group, commented: “This move signals a potential turning point for the buy-to-let sector this year and we are considering multiple purchases currently in the pipeline, anticipating the likely reduction in mortgage interest rates.” 

But some brokers were sceptical that other lenders will follow suit. Kirsty Wells, director of Saint Leonards-on-Sea-based Blueprint Mortgages, said: “I hope other buy-to-let lenders will follow suit but think it's unlikely in the short term.”

Joe Garner, managing director of Joe Garner Consulting cautioned that the real problem is less rates and more the legislative and fiscal changes in the buy-to-let sector. “This is good news and it is likely more BTL lenders will follow suit. However, the rates aren’t the real problem. The issue for small-scale buy-to-let investors and accidental landlords is Section 24 of the Finance Act 2015. Good quality landlords are being unfairly penalised in a way that has paralysed the buy-to-let market. Interest costs should be deductible, especially as landlords are tasked with upgrading their properties to meet energy standards.” 

Wes Wilkes, CEO at the Newcastle-under-Lyme-based wealth manager, Net-Worth Ntwrk,  was pleasantly laconic: "This is great news and The Mortgage Works should be applauded.”

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11 responses from the Newspage community

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Kundan Bhaduri
Property Developer and Portfolio Landlord at The Kushman Group
As portfolio landlords closely observing the property market, we welcome TMW’s announcement of reducing fixed rates by up to 0.95% across its new business range. This move signals a potential turning point for the buy-to-let sector this year and we are considering multiple purchases currently in the pipeline, anticipating the likely reduction in mortgage interest rates. The resilience and adaptability of the BTL market are evident, and if more lenders follow suit, it could unlock new opportunities for all involved. This shift provides a window of opportunity to optimise one’s investment strategies and acquire properties that align with long-term goals. As portfolio landlords, we recognise the importance of seizing favorable market conditions and remain very optimistic about the buy-to-let sector's long term future.
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Lewis Shaw
Owner and Mortgage Expert at Shaw Financial Services
This can only be a positive sign from one of the biggest buy-to-let lenders in the UK. Clearly, they think the peak in rates has passed, and with volatility subsiding and the housing market, particularly the buy-to-let sector slowing, this will be a welcome shot in the arm for landlords. This size of rate drop should also shake up the market as where The Mortgage Works goes, others are sure to follow.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
This is a positive step in the right direction for a buy-to-let market that has been badly broken by the higher rates and stress-test calculations lately. Hopefully, more lenders will follow suit shortly. Always interesting to see plenty of notice can be given ahead of rate reductions but not when the shoe is on the other foot.
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Jamie Lennox
Director at Dimora Mortgages
It's great to see buy-to-let lenders reduce rates and landlords around the country who were considering selling up may breathe a sigh of relief. We hope to see more lenders follow suit to try and ignite the buy-to-let sector again before it reaches a crisis point.
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Riz Malik
Founder & Director at R3 Mortgages
This is fantastic news for landlords who may have been feeling neglected. The Mortgage Works' substantial drop in rates is particularly noteworthy, especially following the base rate hike we saw only yesterday. If other companies decide to emulate TMW's approach, it could provide new opportunities for landlords who previously felt stuck without options. I'm optimistic that the upcoming weeks will bode well for the mortgage market, especially if the inflation data set to be released on the 16th paints a favourable picture.
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Elliott Culley
Director at Switch Mortgage Finance
TMW has been leading the way with BTL rates this year, so it doesn't surprise me that they are the first to offer much better rates in the market. The mortgage rates still have some way to go to help landlords, but this is a step in the right direction.
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Graham Cox
Founder at Self-Employed Mortgage Hub
With two-year swap rates falling steadily for the past few weeks, news of a 95 basis point cut in some of The Mortgage Works' buy-to-let mortgage rates is a sure sign the inflationary 'panic' may be starting to subside.
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Wes Wilkes
CEO at Net-Worth NTWRK
This is great news and The Mortgage Works should be applauded. This seems consistent with the view that the Bank of England may only have one rate rise left, if any, as the market is now pricing in peak rate before the end of 2023.
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Ben Tadd
Director at Lucra Mortgages
This could signal a significant milestone in the start of rate reductions in the buy-to-let market, following those seen with residential rates in the past few weeks. Landlords up and down the country will be praying that TMW's bold approach seen today triggers a domino effect with more lenders jumping on the bandwagon and slashing their rates. This is a welcome relief to landlords whose deals are due to end in the next 6-12 months and, assuming these new lower rates hold, they may not have to sell their investment properties when their current fixed rates end after all.
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Kirsty Wells
Director at Blueprint Mortgages & Protection
I hope BTL lenders will follow suit but think it's unlikely in the short term.
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Joe Garner
Founder & Managing Director at Joe Garner Consulting
This is good news and it is likely more BTL lenders will follow suit. However, the rates aren’t the real problem. The issue for small-scale buy-to-let investors and accidental landlords is Section 24 of the Finance Act 2015. Good quality landlords are being unfairly penalised in a way that has paralysed the buy-to-let market. Interest costs should be deductible, especially as landlords are tasked with upgrading their properties to meet energy standards.