Mortgage options are increasing for first-time buy-to-let landlords


As the number of first-time buy-to-let landlords has risen, mortgage availability is increasing for new landlords. What does this mean for the sector?

Over the past 12 months, the percentage of mortgage deals available for first-time buy-to-let landlords has risen. The number of deals has fallen year-on-year. However, mortgage availability decreased overall throughout the COVID-19 pandemic.

On 1 February 2020, there were 1,635 mortgage deals available for new investors. A year later, this decreased to 1,311, but the percentage of the buy-to-let market available to first-time landlords has risen from 61% to 65%.

Eleanor Williams from Moneyfacts says: “Overall availability contracted sharply last year, which makes it even more positive to note that at 65%, the proportion of the market that is available to first-time landlords has grown by 4% year-on-year, meaning that would-be investors have plenty of choice, and is also an indication that providers are committed to servicing this demographic of borrowers.”

The current state of the mortgage market

At the end of 2020, mortgage approvals hit a 13-year high and has continued at record levels. With the stamp duty holiday extension, the sector will likely remain busy in the coming months. Mortgage availability even recently hit the highest level since the first national lockdown in March 2020. This shows lenders are continuing to gain more confidence.

The government also recently announced the new mortgage guarantee scheme, which will provide greater mortgage availability for homebuyers with 5% deposits. This will especially help first-time buyers find more mortgages with smaller deposits.

A rise in first-time buy-to-let landlords

Over the past year, there has been a rise in small and first-time buy-to-let landlords. The stamp duty holiday and low interest rates have enticed more new landlords to enter the buy-to-let sector. During times of instability and uncertainty, and when savings rates are especially low, property in the UK can be an especially attractive form of investment.

With an increase in new landlords entering the market, lenders have gained more confidence and are becoming more willing to lend to first-time landlords. Throughout the coming months, mortgage availability will likely further increase, providing greater choice and competition.

On 1 February 2021, the average two-year fixed rate for first-time landlords was 3.1%. And the average five-year fixed rate sat at 3.66%. However, there are much more affordable deals than these average rates. The lowest rate currently available is 1.64% for a two-year fixed mortgage.

“Those who are considering whether this is the right time to invest would be wise to secure professional, qualified advice to help support and navigate through their choices,” Eleanor Williams comments.

“There may be benefits to setting up as a limited company, some products may require forethought regarding the number of properties they can have in their portfolio, and of course, whether the timing is appropriate for their own circumstances. Careful planning and ensuring that they protect any investments will be vital in these uncertain times.”

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800


Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator


Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.


Not a member? Sign up for free

buy-to-let mortgage

Mortgage options are increasing for first-time buy-to-let landlords


By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.