NatWest has made an announcement that has sent shockwaves through the buy-to-let sector. Experts are warning that the mortgage news could have dire and lasting consequences for landlords.
Late yesterday, NatWest released a statement revealing changes to their end dates and rate adjustments for new and existing customers. However, the most alarming development was the sharp increase in buy-to-let rates, soaring up to 157 basis points.
Lewis Shaw, the owner and mortgage broker at Riverside Mortgages, expressed his disbelief, saying, “I’m no longer sure what level of reality I’m meant to be operating on. This could sound the death knell for buy-to-let, at least with NatWest. Something has clearly spooked the money markets around 2 pm [yesterday], and the two-year gilt yield has shot above its peak following the mini-Budget in September. This is extremely worrying, and I don’t know where it ends.”
Other mortgage experts echoed Shaw’s concerns, highlighting the significant impact on landlords. Riz Malik, director of R3 Mortgages, remarked, “The considerable rise in mortgage rates on buy-to-let properties underlines the flux in the market at present and introduces yet more hardship and pain for numerous landlords. With each passing day, the financial calculations seem to make less sense. This is a significant blow for the entire UK buy-to-let market.”
Justin May, the managing director of EHF Mortgages, expressed dismay over NatWest’s rate hikes, affecting schemes such as Buy-to-Let deals, Green Mortgages, and Help to Buy. Some deals witnessed increases as high as 1.38 percent, while their standard products for remortgages and purchases faced a less welcome 0.2 percent rise. May questioned, “When will it end?”
Luke Thompson of PAB Wealth Management offered his perspective, suggesting that NatWest’s latest rates indicate a reluctance to engage in the buy-to-let mortgage market at this time. Thompson speculated that the bank wants to gauge the direction of swap rates in the coming weeks and adjust their buy-to-let pricing accordingly.