According to data, by the Halifax, deals are now available offering under three percent rates that beat the consumer residential mortgage deals. Virgin Money, for example, is offering a bespoke buy-to-let mortgage deal at a 2.8% fixed rate two year deal with a £1,995 fee. This is one of the industry's lowest buy-to-let mortgages.
However, as always with the curse of the small print, in order to be eligible for the deal, a deposit of upwards of 40% is expected. Additionally, the rent borrowers can expect from the property should generally be around the 125-130 per cent of the mortgage repayments.
One industry analyst argues: "Encouraging people to take out buy-to-let deals is a no-brainer for banks. The returns on buy-to-let mortgages are higher, with lenders able to charge interest at least one percentage point more than residential deals — however, the risks are the same."
However, the Halifax and Virgin Money claim the move will help resupply a dwindling supply of rental properties. That said, the wider issue, the Halifax concede, is a problem in the house building market - more properties are needed to help bolster the wider UK property stock.
