RLA News Service

After having experienced 18 months during which time buy-to-let loans all but dried up in Britain, residential landlords have reason to hope that lenders may finally start reducing both the required deposits, as well as the interest rates charged to more manageable levels. One of Britain’s major fee-free brokers, London & Country, was among the first to introduce a more attractive three-year fixed rate of 6.49 percent, as well as loans amounting to up 80 percent of a given residential property’s value. This represents a notable improvement, considering that until this week buy-to-let investors and landlords were required to secure a deposit of at least 30 percent.

The Nottingham Building Society has reportedly followed suit and has introduced a modest interest rate cut. As such, landlords with new buy-to-let loan arrangements can now pay 5.59 percent interest, as opposed to 5.89 percent on three year fixed mortgages. Additionally, Nottingham now offers loans for up to 70 percent of a residential property’s value.

David Plaister, representing LetAssured, noted that the combined effect of lowered interest rates coupled with reduced minimum deposit requirements mean that landlords have more “realistic products” to choose from when they seek to secure a new buy-to-let loan. Additionally, the fact that property prices remain low and that mortgages finally appear to be making a comeback suggest that the real estate market is once again a “serious investment vehicle.” At the same time, Plaister noted that even if buy-to-let loan conditions may have improved, landlords should still exercise caution when considering property purchases, and when choosing firms to manage them.