As the market for renters increases in the UK, with more people choosing to rent instead of purchase a home, it is only logical that renters are taking an increased interest in what the actual renting laws are. One that they are noting is that they need to ask their landlord to see the lender’s permission to rent a property.

As a result, ‘amateur’ landlords are suffering since they do not actually have the lender’s permission and lose not only clients, but are forced to actually head to the banks to ask for approval. Usually, amateurs are landlords that are letting out property on a short term basis until they can find an actual buyer, but they choose not to tell their lender that they are doing so because this would result in an increase in their mortgage rates.

Therefore, in the end they are losing out since they are being forced by savvy consumers to tell the banks what they are up to. The obvious question is why tenants would care whether a landlord is signed into a buy to let mortgage at all, because the mortgage rate would not affect them at all. However, the truth is that a tenant can find themselves in trouble if they are not careful when choosing a landlord.

This is due to the fact that if a tenant lets a home from a landlord that does not have permission from their landlord they can easily find themselves out on the street if they default as the bank has no responsibility to them in terms of allowing them time to exit the property in default.

Associate director of letting agent Mary Charsley for APW Management stated that they are now seeing more tenants that ask to see lenders’ consent from the banks before letting out a property.  She added that in the past it was enough to just get assurance from landlords, but now many tenants are taking the extra step and double check that what they are being told is actually true by asking for written proof.

The continual decrease of fixed mortgages in the buy to let market has pushed many landlords that were teetering on the edge of buying more properties into making investments. Outside of the fact that rates are low, buy to let lenders have another reason to invest in property; because the outlook for renters looks to be increasing as well.

In fact, Andy Young from the Landlord Centre stated that right now is an encouraging time for investors to jump into the market full-fledged due to the fact that more people are choosing to rent and the rates prove that the market is remaining resilient.

One of the reasons that there is an increase in renters is the fact that mortgage rates continue to sky rocket and many banks are now making the situation even worse for homeowners by increasing their SVRs.  In fact, during the beginning of this month millions of homeowners were affected by a large jump in the SVRs offered by many of the major mortgage lenders including the RSB and Halifax.

In the face of paying large amounts in interest, many potential homeowners are simply deciding to rent instead which in turn is creating a very high demand for potential landlords to cash in on. Assetz agent Stuart Law stated that at the moment the rental market is considered to be ‘booming’ with gross yields coming in at around 8% and net returns on buy to let investments weighing in at a very comfortable 5%.

Therefore, even if the housing market continues to crumple it seems safe to say that investments in rental properties are still going to cash out, making the housing market look very desirable to landlords and those who want an investment that they know will pay off down the road.

In order to make room for their new buy to let mortgage rates Skipton has scrapped its entire current buy to let products and instead has created new fixed rate products that are set at two, three, and five year terms to allow anyone the chance to get in on the lending market.  Some of the rates as much as .40% lower than their previous offerings making them very attractive to lenders that want to expand their portfolios or those that want to start building a buy to let portfolio with a solid investment opportunity.

Skipton head of products manager Kris Brewster stated that two year fixed mortgages are very popular on the market among customers right now and therefore the building society is very pleased that they are able to bring two new products to the table to entice their customers with.  Brewster also added that now that the private lending sector is starting to regain its strength many people are thinking about investing their money into property instead of cash due to the fact that cash offers a low interest rate when compared to what property could potentially offer.

The two year fixed rate will come set at 70% LTV and a five year fixed rate that is set up at 75% which is pretty high for the current state of the mortgage market.  Mortgage rates that are offered with these deals range between 4.69% and 5.69% depending on the deposit that can be offered and the credit history of the applicant.  Attached to the mortgages are a £245 application fee and a £750 completion fee although in some special cases the completion fee could increase up to £1,250 for the five year product that has a 70% LTV.

New figures that have been released from the Landlord Centre, a leading broker of buy to let mortgages, reveals that the cost of buy to let financing has actually remained stable for most of 2012; making it one of the only areas of the mortgage market that has not been hit this year.  In fact, fixed mortgages for buy to let landlords have actually gotten a bit cheaper for landlords making the option of building one’s portfolio as a landlord even more promising.  The average rate for a fixed buy to let has fallen down from 4.93% in 2011 to just 4.82% this year although the variable rate has increased slightly by about .3%.

Specialist Mortgages for Business reports that most lenders have actually cut their buy to let mortgage rates and even some of their tracker rates bringing them back down to what were seen at the start of the year.  In fact, last week BM solutions cut many of its two year products down by ten base points which is a sizable cut.  Nationwide Building Society subsidiary Mortgage Works also dropped the price on their two year trackers by about .2% and dropped their fixed rate by about .15%.

Landlord Centre broker Andy Young stated that the recent cuts from many of the major lenders is encouraging for investors in the buy to let mortgage market and with the competition getting tougher between the lenders the product prices should stay down.  John Charcol mortgage broker Ray Boulger also agreed that competition is one of the main reasons why the rates have stayed down for buy to let mortgages despite the shake-up of the SVRs in the residential market.  He added that more lenders have entered the market due to the higher margins that are now available on the market.

The Labour party wanted a mandate that would require all lenders to be advised clearly on the fact that interest rates could change over the lifetime of the mortgage and how rate increases could change the actual costs and affordability of the mortgage package that they are considering purchasing.  Chris Leslie, the Shadow Treasury financial secretary, led the call for the amendment that would have brought new proposals to the table over the next six months.

Mark Hoban, the Treasury financial secretary, stated that the change to the bill was not needed because the FCA is responsible for checking and requiring that mortgage providers offer an adequate amount of information to borrowers.

According to Hoban, placing a separate amendment to spell out that lenders needed to inform lenders about increasing mortgage rates was not necessary.  He also added that many lenders already offer mortgage lenders information about this anyhow since they want to avoid foreclosures down the road.

Hoban went on to explain that those who seek out fixed mortgages already receive information on changing interest rates and there is currently a consultation being conducted on the mortgage market.  One of the provisions that are part of the consultation includes requiring lenders to think about the changing interest rates in terms of each lender before offering them a home.

Therefore, the implication is that if lenders are lending funds responsibly and weighing in the change in interest rates then a lender should already be deemed able to afford the change down the road making it a non-issue.

Leslie on the other hand defended the proposal before it went up to vote stating that it was needed to help protect consumers down the road when their mortgages suddenly become more expensive because of the jump in interest rates.

He explained that mortgage rates are not going to stay low forever and people need to know that in the future mortgage rates are going to increase and therefore need to be ready and able to accept the change. He added that he was worried consumers will believe that mortgage rates are really this low when in fact the current mortgage market is far from normal.

The fall in the five year fixed term should be of interest to savvy homeowners with a mortgage that is on a standard variable rate given the fact that many of the larger lenders and a handful of the smaller lenders have announced that they will increase their SVRs come May 1^st.

Moneyfacts.co.uk spokesperson Louise Holmes stated that the average fixed mortgage rate has been coming down over the last few years and they are currently at the lowest that the market has seen them in the past two years.

She added that fixed mortgages are particularly interesting to those that like knowing what their monthly payment is going to be for a certain designated period of time regardless of how the market performs.  She also stated that this makes it easier to play for a financial budget since the repayment amount does not fluctuate over time requiring adjustment in the family budget.

One of the reasons that lenders are able to offer the best mortgage rates on fixed products is due to the fact that the price of lending in the swap rate market has lowered over the last few years helping out lenders that offer long term mortgage products.

Combined with the fact that the Bank of England is expected to keep the interest rate set at the low .5% for at least the rest of the year if not longer, borrowers should take advantage of the low rates while they are still available on the market.

Chief Executive for SPF Private Clients, mortgage broker Mark Harris stated that a five year deal is a logical length of time for the borrower that wants the certainty that comes with a fixed rate mortgage product.

He explained that a two year fix is not going to be that helpful since rates likely will not start to change until the two years are up and added that long term mortgages of ten years or more can be tricky. However, given the fact that there will be changes in the market over the next five years locking into a deal now can be a great way to get low rates and security.

This is due to the fact that the average mortgage cost for any property is starting to increase and soon this will affect them as their terms come to a close and renewal terms and SVRs no longer look addition, rents are starting to fall after a steady rise over the last two years which is also going to affect their potential profits.

In February the Wales and England average monthly rent came in at £707; which is about a 1.6% drop compared to the peak of rents in October of 2011 according to a report from LSL Property Services. At the same time, as the eurozone crisis continues to increase the cost of borrowing, the larger banking institutes have been announcing sharp increases in their buy to let mortgage rates.

In the past months some of the larger banks such as Leeds BS and Santander have both increased their rates and many more are expected to follow in the coming months. Leeds increased other products outside of their buy to let mortgages as well impacting the mortgage market in general.  For instance, Leeds BS choose to increase their fixed mortgages up to 4.35% versus the previous offer of 3.99%.

This increased the monthly mortgage payment on an average £150,000 mortgage up to £544 which is a large difference for a family or landlord that is used to paying the original mortgage rate of £499 per month.  However, landlords may still be able to come out on top compared to home owners.

This is due to the fact that rents are still expected to stay reasonably high and house prices are expected to continue to drop. Therefore, most people will likely continue to rent instead of buy which is a good market for landlords.

n addition, many analysts believe that the rent dip was just a temporary result of tenants purchasing first time homes before the stamp duty holiday came to a close in March and that the rents will go back up now that the stamp duty is back in place. At the very least, rents are still about 3.5% higher than they were in February of 2012 which helps keep the outlook positive for landlords.

With the stresses of the market you would think that young professionals would want to stay as far away from the housing market as possible and instead rent without half of the obligation.  Yet, they are still out there looking for great first time home buyers deals.

Of course, you have to bear in mind that most of these young professionals likely grew up in a home that their parents owned, thus owning a home seems more of a rite of passage than a business decision.

Regardless of their outlook, the tighter criterion for renting a home, lower LTVs, and larger mortgage rates mean that it is a bit harder to get up on the ladder. It used to be just income multipliers that decided if one was a good candidate for a mortgage, but now many major lenders judge mortgage applications based on ‘ability to pay.’

It used to be that first time buyers received better deals and the best mortgage rates simply based on the fact that they are not part of the mortgage chain market and therefore are fresh applicants. However, as the price of lending continues to increase and now high deposits are reasonable for keeping most out the market lenders have been forced to find other methods and schemes in order to help first time home buyers actually get back into the market.

Due to this fact, even with the poor economic conditions there is more flexibility being introduced for first time buyers into the market which is a very helpful factor. One adjustment that has been made is that many of the larger banks such as Halifax and Nationwide will extend mortgage terms for forty years instead of just 25 which will help make a loan more affordable.

Of course, in the long term borrowers will end up paying more unless they remortgage successfully, but this is a good way to at least get out into the mortgage market. Lenders also are offering new incentives to first time buyers including free valuation fees cash back, and legal fee assistance which are all great features to take advantage of.

Most banks are aiming to lower the amount that they make available for lending this year which is hurting those that want a to purchase a new home and turning the UK into more of a renter’s market than a buyer’s market with most analysts predicting that the buy to let market will make up the majority of lending this year.

This week Co-op joined the group of lenders that have had to announce higher SVRs, increasing their average term by about 0.5% up to the standard rate of 4.74% as of May 1^st. Over the month of March Bank of Ireland, Halifax, Yorkshire, and Clydesdale Banks have all also announced new mortgage rates, making it harder for the average home owner to find a lower deal on their SVR at any large high street lender.

Chelsea Building Society also announced an increase of 20 base points to all of their fixed mortgages deals and Nationwide Building Society raised the cost of both tracker and fixed mortgage deals. John Charcol mortgage broker Ray Boulger stated that there has been a steady trend of major and smaller lenders increasing their mortgage rates over the last month or so,  with many doing so because they want to lend less.

He explained that most lenders are saying that the wholesale funds increasing rates are the reason why they are being forced to increase SVRs, but over the last few weeks this is not so much the case as they have stayed steady. Therefore, the reason for the increase is simply to decrease the amount of lending they conduct with consumers.

Largemortgageloans.com broker Nigel Bedford said the same as he pointed out that the interbank lending rate and the two year rate swaps that are used to create a mortgage package have actually decreased slightly therefore it cannot be blamed on the high cost of lending funds. Despite this fact, most brokers are expecting that mortgage rates will continue to increase over the next few months making it vital that those who want a good deal get in on the market now.

As buy to let lenders continue to dominate the lending market this is Skipton’s attempt to lure them towards their products. The two year fixed mortgages are available with LTVs as high as 70% and come with an attached rate of 4.69%.  The completion fee for this product is £750 and the application fee is £245.

Also available is another two year product that offers the elusive 75% LTV but  as a trade off the rate increases up to 5.09% with a completion fee of £1250 and the same application fee as the previous product. These are good choices for the landlord that wants a short term deal with the hope of better products on the market once the loan value decreases.

For those looking for a slightly longer deal Skipton is also offering a three year set of fixed deals that also range in value from 70-75% LTVs.  The buy to let mortgage rates range from 4.59% to 5.39%; with the latter corresponding to the 75% LTV for those that do not have as high of a deposit or equity in their products. The higher LTV product comes with a completion fee of £1,250, the lower product comes with a completion fee of £750, and both have an application fee of £245.

Also available are two five year fixed rate products also set with 70 and 75% LTVs. The five year 70% LTV product is an excellent choice for those looking to cut down on fees as it does not carry an application fee and comes with a 2% completion fee based on the value of the loan and an overall interest rate of 5.19%. The 75% LTV comes with an interest rate that is set at 5.69%, an application fee of £245, and a completion fee of £1,250 which makes it a good choice for those with a high value mortgage.