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