Buy to let may have been in the doldrums in recent years thanks to new taxes and stricter regulations but there’s genuinely good news - the choice of mortgages for BTL investors is at the highest ever recorded since the financial crisis well over a decade ago.
Today, landlords have the choice of 2,162 buy-to-let mortgages, meaning the number of products has not been higher since October 2007, when 3,305 products were available.
The figures come from independent mortgage market analyst Moneyfacts.
“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.
“Indeed, the average two-year fixed BTL mortgage rate has increased by 0.20 per cent to 3.12 per cent since September 2018 and the average five-year fixed rate has increased by 0.15 per cent over the same period.”
He says there is a strong argument for putting the new extra choice down to BTL mortgage providers competing against each other and accepting there is a little more to risk into their product rates due to uncertainty over future economic conditions.
“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” adds Cook.
Moneyfacts says that in March 2017 there were just 1,456 BTL mortgage products; the average two year fixed-rate was 2.96 per cent and the average five year fixed-rate was 3.77 per cent.
In March 2018 there were 1,765 BTL mortgage products; the average two year fixed-rate was 2.96 per cent and the average five year fixed-rate was 3.43 per cent.
Now, as March 2019 nears, there are 2,162 products; the average two year fixed-rate is 3.12 per cent and the average five year fixed-rate is 3.61 per cent.