Mar 2019

News

Number of Buy-to-Let Mortgage products are at a 12 year high

The number of buy-to-let (BTL) mortgage products on the market is the highest it has been since the financial crisis, giving landlords the most choice in nearly 12 years.


There is finally some good news for landlords, after recent changes in taxation and stricter regulation, the choice of mortgages for BTL investors is now at the highest it has been for a considerable amount of time.

Almost 400 BTL products have been added to the market in the last year, with a total of more than 2,000 available,  the highest number since October 2007, when 3,305 deals were on offer.

According to Moneyfacts there are 2,162 BTL deals available today which has grown from 1,765 last March and 1,982 in September, including 467 for those limited company landlords not using alternative tax structures to hold their property portfolio in.

Almost 400 BTL products have been added to the market in the last year alone, however, in contrast to the residential mortgage market, where intense competition is driving interest rates down, BTL lenders have tended to push rates up over the last five months.

According to Moneyfacts, between March 2017 and September 2018, the average two-year fixed rate buy-to-let mortgage was around 2.86% to 2.96%,  the same product  is now at 3.12%.

The average five-year fixed rate deal has also increased since September 2018, rising from 3.46% to 3.61%, although this is not quite as high as the 3.77% in March 2017.

For landlords holding their property in limited companies, the average two-year fixed rate is at 4.08% and the average five-year fix is at 4.53%.

The higher rates are due to the way BTL mortgages are assessed as mortgage providers consider factors such as rental income and affordability during the assessment process. 

"It is encouraging that buy-to-let landlords have more mortgage choice than they have had at any time in almost 12 years. Total product numbers have increased by 397 over the past year and by 706 over the past two years to stand at 2,162 products today" according to Moneyfacts' finance expert Darren Cook.

"Despite ongoing uncertainty in the property market, providers are not shying away from offering landlords a greater choice of products, although it is also evident from our research that heightened competition to try and attract BTL business has not resulted in a fall in interest rates, as has recently happened in the residential mortgage sector. 

"The disparity in the direction of movement between BTL and residential interest rates may be due to the way these two types of lending are primarily assessed. BTL mortgage providers generally consider the potential rental income and affordability during assessment, whereas residential mortgage providers typically look back at income earned by the borrower and affordability."

If you would like to find out more about the range of BTL products that are available to you, please do not hesitate to give us a call.


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