Buy-to-let mortgage market ramping up as sector flourishes


The start of 2022 has shown plenty of promise for the buy-to-let sector, with confidence and recovery across the buy-to-let mortgage space. 

The number of buy-to-let mortgage products landlords now have access to has continued to increase for eight consecutive months, according to the latest figures from Moneyfacts. Not only that, but property investors now have the largest number of deals to choose from in more than 14 years.

Lenders are looking favourably on landlords who are either investing in property or looking to secure a new deal, says finance expert Eleanor Williams, meaning now could be a good time to enter or expand into the market.

Spoilt for choice

As we enter into 2022, the data shows that there are an incredible 3,528 products in total available to landlords and investors. Not only is this the highest number seen since Moneyfacts records began, when there were 3,662 deals in 2007, but this is also a rise of 222 products compared with December.

There are also now 945 more buy-to-let mortgage deals on the table than there were pre-pandemic in January 2020. This is a clear demonstration of how the market has recovered, as well as how confidence in the sector has grown rather than declined.

Landlords with decent deposits (25%), can access as many as 1,298 75% loan-to-value (LTV) deals right now. Even those with much smaller lump sums can now choose from 28 products, as opposed to just 8 back in January 2017. In January 2021, in the midst of the pandemic, landlords with just a 15% deposit would have found no products available, says Moneyfacts.

Are buy-to-let mortgage rates climbing?

The Bank of England base rate rise will inevitably affect some mortgage rates and interest rates. It is expected to increase again in the coming weeks or months, so is something that borrowers need to be aware of as it could spell interest rate hikes.

In the buy-to-let mortgage market, there have only been some very small upticks in rates so far, which is good news for landlords looking for deals right now. Across all two-year fixed rate mortgages, average rates have risen by just 0.04%, from 2.90% in December 2021 to 2.94% in January 2022.

The biggest step up was in the five-year fixed rate space with 85% LTV. Here, the average rate has crept up by 0.30%, from 5.22% in December 2021 to 5.52% in January. This is followed by a similar rise in the two-year fixed rate space at 85% LTV – rising 5.17% in December to 5.42% now.

Yet in some ranges, there has been no change. Those looking for a two-year fixed rate with 75% can still get an average interest rate of 2.91%. A two-year fixed rate buy-to-let mortgage with 65% LTV has only gone up by 0.01%, from 2.72% to 2.73%.

If you’ve got a large deposit and you want to fix in for five years, you’ll actually get a cheaper rate now than you would have done last year. The average is now just 3% for these mortgages, down from 3.06%.

Lower deposits mean higher risk

As Emma Williams notes, buy-to-let landlords with the smallest deposits may not be best-placed in the mortgage field right now.

“Landlords who have a smaller level of deposit or equity, however, may find that, as with the two-year fixed rate, the average five-year fixed rate in the top 85% LTV tier has risen,” she says. “Increasing by a significant 0.30% this month, at 5.52% this is now 0.23% above where the equivalent rate sat in January 2017.

“It is fair to note that this remains quite a niche lending area with comparatively few products on offer, and is viewed as higher risk by many providers. Therefore, it takes very little movement, or just a slight adjustment from any of the handful of lenders who operate in this arena, to make a notable impact to the average rates.”

She adds that the latest Zoopla findings, that average UK rents increased by 4.6% over 2021, is likely to attract more investment to the sector.

“Our latest data suggests that providers seem prepared to offer a variety of deals for landlords who are either investing in property or are looking to lock into a new deal, so anyone considering their next move in the BTL arena would be wise to seek advice from an independent broker to assess the changing market.”

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

Buy-to-let mortgage market ramping up as sector flourishes


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.