Another month, another interest rate rise, and yet more uncertainty for buy to let mortgage holders. Now it seems in conjunction with all these changes, some lenders are withdrawing fixed deals on BTL mortgages. This statement came from a much-respected independent mortgage monitor in early June.

This is not the first time this happened. In September last year, some thirty-seven providers withdrew their fixed rate buy-to-let mortgages too. This is just the latest round of withdrawals.

How many have withdrawn fixed deals?

No fewer than ten providers have withdrawn all their fixed rate buy to let deals, which has reduced the number of products available by over four hundred.

Further, since the beginning of May, the average rate on both two year and five-year fixed deals rose 5.61% and 5.52% respectively. And that is just one month.

This has also impacted owner-occupiers with around eighteen withdrawing either part of their fixed rate range, or every single product. There are now just over five thousand mortgage deals available, down from close to five and a half thousand. Rates have increased to 5.38% on two-year deals, and 5.05% on five-year deals.

More withdrawals in June

At the end of June, several more mortgage providers withdrew their products too. However, one provider said this withdrawal is only temporary and is limited only to owner-occupier mortgages along with debt management loans, Right to Buy and Help to Buy.

All providers have increased their interest rates in line with the new Bank of England increase.

What is causing all this?

Independent financial advisors and landlord representative groups alike are clear: these problems are caused by both ongoing and projected future interest rates hikes. This has made providers reassess the deals they currently offer.

A year ago, customers could expect an average of 3% for a fixed deal. That is now 5%. Future potential increases have meant (directly) such products are no longer viable for banks and building societies.

Is student letting a good investment?

With all the uncertainty over interest rates hikes, and with the government promising to look deeper, everything seems uncertain.

However, the student market remains one of the best places to invest in property even amid all this.

With student lets, you have a ready-made population of people who need accommodation every year. With universities investing in new luxury apartment properties, there will always be a market for students seeking to live together in a regular HMO (house of multiple occupancy).

Despite stereotypes, students are a reliable demographic – partly because they are learning responsibility of living alone, and partly because they have family to support them up if they struggle financially.