Buy-to-let fixed rates rose in April for two, three and five-year terms, demonstrating a reversal of the reductions seen in March.
The latest data from Mortgages for Business revealed widespread growth. Only five-year fixed rates failed to return to the average shown in February, reaching just 3.76 per cent, stabilising at 0.01 per cent beneath their February average.
These figures mark the first time since January that the data has revealed any rate increases, for both fixed and variable products. Some rates had seen an even longer decline, notably three-year fixed rates which saw a drop spanning every month from April 2016 to March 2017. Over this period, the average three-year fixed rate fell from 4.50 per cent to just 3.53 per cent. Each month from June saw a record low.
Whilst fixed rates increased during April, the pattern did not extend to variable rate products. Whilst two-year and five-year tracker rates were up by 0.02 per cent and 0.12 per cent respectively, other offering continued to fall. Three-year variable rates were down 0.02 per cent, whilst term product rates declined by 0.11 per cent.
Steve Olejnik, chief operating officer of Mortgages for Business, said: ‘For some time now buy-to-let mortgage lenders have been cutting rates to maintain lending volume in a sector that has been actively targeted by both the taxman and the regulator. Rates can only fall so far, however, and figures from April suggest we may have reached the limit.’
However, not everyone is expecting rises to continue. An advisor from broker Independent James commented: ‘We have not seen massive increases because I think a lot of lenders have big targets for buy-to-let but regulations have restricted them on that, so the only way they can win business is on rates. Mainstream lenders are keeping their rates low, but they may be looking at specialist lenders; and if they are taking the whole of the market into account, then maybe some of the rates are going up.’