CRISIS: Mortgage brokers call for calm as lenders withdraw 30% of BTL loans

Landlords have been advised not to panic after lenders pulled hundreds of buy-to-let mortgage products this week in response to the Chancellor’s mini-budget.

Moneyfacts BTL product availability data shows 507 deals were withdrawn, reducing the number to 1,221 on Tuesday, a Moneyfacts record and the highest overnight product fall it has ever recorded.

HSBC UK, Virgin Money and Skipton Building Society all ditched buy-to-let mortgages for new customers, while The Mortgage Works withdrew its fixed rate BTL mortgages.

Daniel Lee (pictured), principal at Total Landlord Mortgages, says lenders are expected to re-price products this week and that we could see a 1 to 1.5% jump; the new rates are all above 5% on a fixed rate.

He tells LandlordZONE: “Landlords will be wondering whether to lock into a five-year rate or ride the wave, but while those low rates are gone for now, the key thing is not to panic – they could come back down again in six months to a year”.

Claire Flynn, mortgage expert at money.co.uk, says that the withdrawal of buy-to-let deals over the last week is arguably reminiscent of the credit crunch in 2008.

“The restriction of finance costs relief over the past few years means the increased interest rates will be felt directly by landlords up and down the country,” she tells LandlordZONE.

“Continuously rising rates could force them to either sell up or increase rents, in order to stand a chance of turning over a profit.” 

Jeni Browne (pictured), director of BTL broker Mortgages for Business, is more positive. She adds: “Projections for house prices and yields remain strong due to the ongoing demand for properties from both renters and buyers. The pound will stabilize, energy prices will drop, and landlords are unlikely to see the value of their property crash.”