Blow for buy-to-let borrowers

Published 15th Oct 2008

Mortgage lenders are making it more difficult for landlords despite the Government's attempts to unfreeze the market

Bank of Ireland has withdrawn its buy-to-let mortgage deals for landlords with less than a 25 per cent deposit in the latest sign that the mortgage market has failed to improve despite the Government's attempts to unfreeze the market.

The lender is only offering two fixed-rate buy-to-let deals from tomorrow and only up to 75 per cent of a property's value. The three-year fixed rate deal has a rate of 6.94 per cent with a 2 per cent fee.

It follows a similar move by Bristol & West, the fourth biggest buy-to-let lender, which reduced its buy-to-let range on Monday.

Bradford & Bingley, the nationalised lender which specialised in buy-to-let mortgages, however confirmed that it was passing on the full Bank of England half-point base rate cut to borrowers on a variable rate.

The latest moves come just a day after Nationwide scrapped its conventional mortgages for borrowers with smaller deposits and hiked rates on its tracker deals.

Britain's biggest building society has pulled all its mortgages, sold though brokers, for borrowers with a 10 per cent deposit.The lender has replaced its 90 per cent loan-to-value (LTV) deals with products which require a 15 per cent deposit. Only one three-year deal is now available up to 90 per cent of a property's value and it is being sold solely through its branches.

It also increased the margins on its tracker products, which are pegged to the base rate, by up to 0.61 percentage points. It said the moves were designed to "maintain control of the volume of business the society is attracting, and continue lending in a prudent and responsible way.”

Northern Rock said that it was reducing its standard variable rate (SVR) by only 0.15 percentage points to 7.34 per cent. Its SVR remains one of the highest of the high street lenders.

Ray Bougler, of John Charcol, the mortgage broker, said: “Lenders will continue to cut tracker deals and increase rates in an effort to protect profit margins.”

Funny that the tax payer has funded the banks from collapse....but they still get away with charging inflated rates when the Bank of England base rate is low.....nice one Gordon who is running this - you or the banks!!!!

Source: ' times '

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