The buy-to-let boom may be finally coming to an abrupt end as borrowing costs rise for the first time since April 2016.
Research, published by lender Mortgage for Business, revealed that costs for two, three and five-year fixed-rate loans for buy-to-let properties all grew in April.
The average two-year fixed loan was 2.9 per cent in April, up from 2.86 per cent in March. Likewise, three-year deals rose from 3.53 per cent to 3.56 per cent, while five-year deals went from 3.74 per cent to 3.76 per cent.
Mortgage for Business said this is the first time buy-to-let rates have increased this year, and the first time three-year fixed mortgages have risen since April 2016.
Steve Olejnik, of Mortgages for Business, said: “For some time now buy-to-let mortgage lenders have been cutting rates to maintain lending volume in a sector that has been actively targeted by both the taxman and the regulator.
“Rates can only fall so far, however, and figures from April suggest we may have reached the limit.”
The move adds to landlords’ suffering in recent months. In April, Government measures to level up the playing field for first-time buyers led to the introduction of an increased rate of Stamp Duty for second homes, and reduced mortgage interest relief.
Lenders have also been forced to introduce strict affordability “stress tests”, which assess the borrower based on their entire property portfolio.