Buy-to-let rates have doubled for landlords, making it far less attractive to invest in property, research from buy-to-let broker Property Master has revealed.
The broker said the typical cost of a 60% loan-to-value 2-year fix has risen from 1.69% to 3.43% in the past eight months.
This means you would have to pay £2,784 more per year in mortgage interest compared to if you bought in January.
Angus Stewart, of Property Master, said: “For many of the smaller players in this market, unaffordable rises in mortgage costs will undoubtedly lead them to conclude buy-to-let no longer works for them.”
This rise in mortgage rates is underpinned by the rising base rate, which has climbed from 0.1% in December to 1.75% now, following the steeper increase of 0.50% on August 4.
A landlord with a typical £160,000 buy-to-let mortgage now has a monthly bill of £494 – £232 more than if you purchased at the start of the year.
There’s also been steep increases in the 5-year fixed rate category, where rates have surged from 1.94% to 3.5% in just eight months.
Over the full 5-year period this means you’d pay £12,480 more than if you bought property with a mortgage in December.