“Heat Goes Out Of Buy-To-Let Sector”

Posted 06th November 2023 by ctatax-admin

Cornerstone Tax is the UK’s leading property tax advisers, specialising in Stamp Duty Land Tax. We’ve reclaimed over £30 million in overpaid SDLT. Contact us for stamp duty advice, or to see if you are eligible to claim a refund from HMRC on overpaid Stamp Duty.

Read the feature on FT Adviser

“Skipton building society has renamed its joint borrower sole proprietor (JBSP) mortgage offers as ‘income booster’ deals in a bid to simplify mortgage jargon for first-time buyers.

Skipton research found first-time buyers feel they have limited opportunities to get on the property ladder as they don’t understand how some mortgage deals work.

The income booster scheme enables home buyers to add up to three people to their mortgage without them becoming owners of the property. The income of these joint borrowers can be taken into account when calculating the size of the loan, which can enable a first-time buyer to borrow more.

The latest data from the Bank of England shows the mortgage and housing market to have dramatically slowed.

Mortgage approvals in September for house purchase slumped to their lowest level (43,300) since January 2023 and net approvals for remortgaging (which only includes remortgaging to a different lender) fell in the same month to their lowest level for more than 20 years.

Net approvals were at 20,600 in September, the lowest figure seen since January 1999.

This suggests that the obligation on lenders to assess whether new customers can realistically afford a loan is encouraging more borrowers to stick with their existing lender, where no such test is required, when they come to the end of an existing deal.

Read: How long does a stamp duty refund take?

Existing lender product transfer and switcher deals also tend to have lower or no arrangement fees.

The Mortgage Works, part of Nationwide building society, is cutting selected fixed buy-to-let mortgage rates by up to 0.5 percentage points. Among its new deals, the lender is offering a two-year fixed rate deal for purchase or remortgage at 4.49% with a 3% fee (65% loan to value). Five-year fixed rates, also for purchase or remortgage, start from 4.99% with a £1,495 fee (55% LTV) and three year rates (product transfer only for existing customers) start from 4.84% with a 3% fee (65% LTV).

Accord, part of Yorkshire building society, is cutting selected BTL fixed rate deals by up to 0.4 percentage points, effective from tomorrow (31 October). It is offering a two-year fixed rates for remortgage at 5.54% with a £1,995 fee (60% LTV), a three-year rate at 5.49% with a £995 fee (60% LTV) and a five-year fix at 5.34% with a £995 fee (65% LTV). The lender will also cut fixed BTL rates on product transfer deals for existing customers from Wednesday (1 November) by up to 0.25 percentage points.

Leeds building society has also announced rate cuts to selected BTL products for new and existing customers. Loans for BTL remortgage for new and existing borrowers with at least 40% equity have been cut by up to 0.15 percentage points. The cuts apply to standard BTL and deals for portfolio landlords with multiple properties. The five-year fix for purchase or remortgage at 60% LTV is now priced at either 5.14% with a £1,999 fee, 5.29% with a £999 fee or 5.44% with no fee.

Read: How an annexe could save you thousands on stamp duty

While buy-to-let lenders continue to slash rates on their mortgage deals, recent research shows more than one in 10 landlords are planning to get out of the investment property market due to higher mortgage costs and increased rules and regulations.

A survey of landlords by property tax consultancy Cornerstone Tax found 15% of landlords are considering selling-up due to rising costs. It follows a report by estate agent Hamptons, that shows landlords are paying £15 billion more in interest annually as a result of higher mortgage costs.

This is a 40% increase (£4.3 billion more per year) on 2022.”

Cornerstone Tax is the UK’s leading property tax advisers, specialising in Stamp Duty Land Tax. We’ve reclaimed over £30 million in overpaid SDLT. Contact us for stamp duty advice, or to see if you are eligible to claim a refund from HMRC on overpaid Stamp Duty.