Mortgages  

Leeds targets landlords with fixed rate deals

Leeds Building Society has unveiled a duo of fixed rate deals at up to 70 per cent for landlords seeking to remortgage customers with no completion fee.

The two-year fix is priced at 3.04 per cent, while the five-year equivalent comes with a 3.49 per cent rate of interest.

Both deals come with a free valuation on properties up to a value of £500,000 and fees assisted legal services.

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In early May, the society extended its range of buy-to-let mortgages with the launch of two fixed rate loans without early redemption charges.

The first of the two-year fixes is available at 2.50 per cent at up to 60 per cent LTV, while the second product is priced at 3.15 per cent at up to 70 per cent LTV.

Each mortgage comes with a free valuation, fees assisted legal services for standard remortgages, and has a £1,999 fee.

Provider view

Jaedon Green, director of product and distribution, said: “Many landlords will be considering their portfolios in the wake of the tax and regulation changes affecting the buy-to-let sector.”

“We expect to see more movement in this market, especially as tax relief on buy-to-let repayments is reduced. The incentives on these latest competitive remortgage deals keep the cost of switching to a minimum and the two fixed terms offer landlords a choice about when they next review their finances.”

Adviser view

Commenting on the five-year remortgage product, Rebecca Robertson, director and mortgage adviser at Kent-based Evolution for Women, said: “I think that is a really good deal. The rate is good, there is no completion fee and the freebies are welcomed. Competitive deals like this are what is needed at the moment to encourage landlords to remain active in the market with the recent rise in stamp duty.”

“You often see buy-to-let products with a good headline rate but come with a hefty fee of around £2,000. This is on top of the valuation and legal costs which can add another couple of hundred pounds to the bill.

“A lot of landlords appear to have changed strategy and are now opting for longer-term fixes because they know that interest rates are likely to rise soon. Less people are taking out interest-only mortgages because there is no longer a tax benefit in doing so and they would rather not carry a mortgage into retirement.”

Charges

No completion fee.

Verdict

Whether the widely perceived slowdown in the buy-to-let marketplace has come to fruition is open for debate. The industry will get a clearer picture on this once the major industry players release their Q3 and Q4 results. In the meantime, lenders have attempted to stave off consumer inertia by discounting or launching new products – complete with free valuation and legal fees to sweeten the deal.

Here the loans are attractive – particularly the five-year deal. Many landlords are willing to pay more for a guaranteed fixed rate for a relatively long period of time because they appreciated that the current low base rate environment is likely to come to an end at some point in the near future. Then again, many industry experts were left red face having predicted a rate rise by the end of 2014.