Good news for buy-to-let landlords as mortgage choice continues to rise

 

The number of mortgage deals for buy-to-let landlords has increased to the highest level since March 2020. Landlords and investors are likely welcoming the additional choice.

With demand in the private rented sector at record-breaking levels, there has also been strong demand for mortgages from buy-to-let landlords. Recently, lenders have brought forward more products across the board, including for buy-to-lets.

The number of mortgage products for buy-to-let landlords is at the highest level since before the first national lockdown due to the coronavirus pandemic. At the beginning of July 2021, the buy-to-let mortgage market had 2,709 products on offer, according to data from Moneyfacts. At the beginning of March last year, there were 2,897 deals available.

This data highlights that the number of deals available has rebounded from the pandemic. Eleanor Williams of Moneyfacts says: “Landlords now have the highest level of product choice that we have recorded in over a year.

“At 2,709 the number of products available to investors is far more than the choice they were faced with this time last year, but perhaps even more interesting is that there are 365 deals more available now than we recorded in July 2019, demonstrating the strength and resilience of this sector in the aftermath of an unprecedented 18-months.”

Buy-to-let landlords with a 25% deposit have the most choice of mortgage deals. This month, 952 deals are available at the 75% loan-to-value (LTV).

What is happening with interest rates?

The average rate for both two and five-year fixed buy-to-let mortgages has increased year-on-year. Two-year fixed mortgage rates went from 2.61% in July 2020 to 2.98% July 2021. This is an increase of 0.37%. Five-year fixed rates have risen by 0.31% from 2.97% to 3.28% during the same period.

Despite the increase in the average mortgage rate year-on-year, rates have still fallen since 2019. This could be particularly good news for buy-to-let landlords nearing the end of a two-year fixed deal.

In July 2019, the average rate on a two-year deal was 3.01%. That is 0.03% higher than this month’s average rate. And the average five-year fixed rate was 3.50%, which is 0.22% higher than the average rate this month.

Additionally, the average rate for a mortgage with 75% LTV on both two and five-year fixed deals have also fallen since 2019 with 0.01% and 0.15% decreases respectively.

Will buy-to-let investment remain strong?

Currently, demand in the private rented sector is particularly strong. Propertymark’s Private Rented Sector report revealed May say a record-breaking number of new prospective tenants registered.

This high demand, along with low interest rates, will likely cause buy-to-let investment to remain strong in the coming months. It could even be a good time for some first-time landlords to enter the buy-to-let sphere.

Eleanor Williams comments: “Whether now is the right time to invest in property may also come down to the desire to earn a decent income.

“Indeed, research from Nottingham Building Society revealed that 61% of landlords surveyed felt property was a better investment due to low-interest rates for savings – and this coupled with high demand for rental accommodation could sway new investors to dive into the buy-to-let sector.”

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

ba-

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.

Login

Not a member? Sign up for free

buy-to-let mortgage

Good news for buy-to-let landlords as mortgage choice continues to rise

Example

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.