Private landlords are remortgaging their properties to prepare for expected interest rate hikes, new research has reported.
The number of Buy to Let (BTL) mortgages has now reached 586, 65 more than just three months ago, according to the latest Mortgages for Business Buy to Let Index.
Perhaps somewhat surprisingly, 65 per cent of BTL mortgage transactions were re-mortgages rather than new purchases, during the first quarter of 2014.
Mortgages for Business reports that gross yields have risen on buy to let properties to stand at 6.4 per cent on average. However, houses in multiple occupation still command by far the greatest yields: gross yields on the average HMO are now 9.6 per cent, down slightly from 10.4 per cent late last year but still significantly higher than other property types.
Mortgages for Business spokesman, David Whittaker, commented: “Landlords know that exceptionally low interest rates can’t last forever. But now they need to act on that instinct. The Bank of England will almost certainly raise interest rates before the general election. Switching to a five year fixed-rate deal is important while these remain so affordable”.
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