Good news for investors seeking buy-to-let mortgages in 2022


For landlords or new investors looking at their borrowing options, buy-to-let mortgages have started to look much more appealing.

Average maximum loan sizes available to buy-to-let landlords in the UK market have grown by 13% over the past year, according to research from Mortgage Broker Tools (MBT).

This major increase in affordability for buy-to-let mortgages will be a welcome boost in the current market. The figures show that the maximum loan size right now is around £421,053, while it was an average £401,053 in December last year.

With affordability levels now at their highest since MBT launched its Affordability Index in August 2020, now could be a good time for landlords and investors to look at their borrowing needs.

Maximising leverage

Commenting on the results, Tanya Toumadj, CEO at Mortgage Broker Tools, said: “The latest MBT Affordability Index shows that the average maximum loan size available to buy-to-let investors is now larger than ever before.

“However, the spread between the average maximum and minimum loan sizes available to landlords has also never been wider.

“So, for investor clients who want to maximise their leverage, it’s vital that brokers are able to easily identify those lenders that will offer larger loan sizes based on their individual circumstances. The easiest way to do this is with an online platform.”

Buy-to-let mortgages add to sector’s appeal

While demand in the buy-to-let sector continues to be strong, lenders have been competitive. This has been the case throughout the pandemic, with more products now on offer from a wider range of lenders.

Aaron Strutt, product and communications director at Trinity Financial, says: “Mortgage lenders are competing on price and, increasingly, criteria to attract borrowers, and they are still tempting them with super-cheap rates.

“So many types of people want to get a BTL because the investment property sector has performed so well over the years.”

He adds that some recent research from Paragon showed that there had been a rise in people in their 60s taking out buy-to-let mortgages. The company even has borrowers in their 70s and 80s who are interested in the sector.

Strutt says: “Lots of first-time buyers want an investment property, as well as those who already own their home. Others ask for help to work out what they need to do to build a portfolio.

HMOs have grown in popularity because of enhanced rents, and more buyers want holiday lets after demand went through the roof during the pandemic.”

First-time landlords having a heyday

The latest analysis by Moneyfacts shows that there were 2,235 mortgage products available last month for first-time landlords. This is a significant increase from the 1,311 mortgage deals on the market in February 2021.

This level of product recovery echoes what has happened in the wider sector, observes Moneyfacts finance expert Eleanor Williams. There is even more on the market now than there was pre-pandemic, showing appetite is incredibly high in the UK buy-to-let market, and lenders are keen to capitalise on this.

The data also shows that 64% of the lender market caters for this specific borrower type, and this figure has held steady year-on-year.

Seek advice

Williams also echoes Tanya Toumadj’s comments about seeking advice before investing. 

She comments: “Those deciding whether this is the right time for them to join the BTL arena might be wise to secure the support of a qualified adviser in assessing their choices and to ensure they are informed regarding upcoming changes to the market and associated risks.

“Careful planning and seeking independent advice could be vital in establishing whether BTL is a viable investment opportunity for them.”

BuyAssociation specialises in buy-to-let property investments, working with first-time landlords as well as experienced property investors. Get in touch for more information.

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buy-to-let mortgages

Good news for investors seeking buy-to-let mortgages in 2022


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