Leeds BS launches initial interest free buy-to-let range

Leeds BS launches initial interest free buy-to-let range

Leeds Building Society has launched a buy-to-let range with no interest to be paid for the first three months.

The range includes four five-year fixed rate products available at various loan-to-value (LTV) ratios.

A 60 per cent LTV product is offered at 2.72 per cent with a £999 fee while a slightly lower 60 per cent LTV is available at 2.82 per cent without fee.

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A higher 70 per cent LTV is also available at 3.24 per cent with no fee and at 3.09 per cent with a £999 fee.

Jaedon Green, director of product and distribution at Leeds Building Society, said an initial 0 per cent interest rate could alleviate some of the pressure on landlords during an initial void period.

He said: "When they first buy a property they might need to decorate or carry out refurbishments before tenants can move in, so clearly there would be no rent coming in over that time.

"Cash freed up at the start of the mortgage could go towards a higher-quality fit-out to help to secure a better rental return."

Mr Green added: "This innovation is the latest example of how we have used our insight and expertise in the buy-to-let market to understand and respond to customer need."

David Hollingworth, associate director of communications at London & Country Mortgages, said with Leeds having used this product structure in the owner occupier market for some time it made sense to consider its appeal to landlords too. 

He said: "Providing a short zero rate period for three months could give a landlord a welcome break from monthly payments which may work well where they want to put their own stamp on a new property.

"It is important to note that Leeds will want the property to be habitable at the point of purchase, so this isn’t something that would work for a refurbishment project but some may like that payment break.

"It’s important for landlords to weigh up the total cost of the deal including the zero rated period. Leeds doesn’t pile on a huge premium in the rate versus its standard deals which is a positive but for some landlords a straight rate will work fine."