Mortgage bonanza for buy to let - best choice for 15 years

There’s a 15 year record high in the number of buy to let mortgage products available for current or new landlords.

The data comes from independent mortgage market monitor, Moneyfacts. 

After a rise of 222 products month-on-month, the year began with 3,528 total products on offer to landlords, the highest number seen on Moneyfacts records since September 2007 and 945 more products than were available pre-pandemic in January 2020.

The average overall two-year fixed BTL rate has increased for the second consecutive month, rising by 0.04 per cent to 2.94 per cent - the highest this has been since September last year. 

The average overall five-year fixed rate on the other hand has remained static at 3.18 per cent since October 2021, despite fluctuations across the various five-year fixed averages at specific loan-to-values, and is the lowest since August 2020.

Moneyfacts says there’s been a recovery in the number of products on offer to landlords with smaller deposits or levels of equity, indicating a level of confidence in the sector. 

After dropping back to only four deals on offer in November, there are now 28 products at 85 per cent LTV, the highest this number has been since March 2020  and a vast improvement on last year, when January 2021 saw no options available in this bracket.

“The level of product choice available to landlords has continued to increase for the eighth consecutive month, with the number of options across all the LTV tiers improving” explains Eleanor Williams, finance expert at Moneyfacts.

“The rise of 222 deals is the highest month-on-month increase in availability that we have recorded since July 2021. At 3,528 total deals on offer, this is the largest number of BTL products we have seen in more than 14 years. 

“Despite changes to regulations, taxation and the impact of the past 18-months, BTL lenders seem keen to entice borrowers, as there are almost 1,000 more products available now than there were two years ago in January 2020, before the onset of the pandemic.

“Following the increase in base rate by the Bank of England last month, we have seen the average two-year fixed rate for all LTVs rise by 0.04 per cent since last month to 2.94 per cent, a shift which echoed recent changes in the residential mortgage sector. 

“Bar a 0.01 per cent month-on-month fall in the average two-year fixed rate at 80 per cent, average rates in the other LTV tiers either rose or remained the same this month, including a month-on-month jump of 0.25 per cent at 85 per cent LTV, fuelling the overall two-year average to rise.”

Williams states that the overall average five-year fixed rate on the other hand has remained stable for four months, unchanged at 3.18 per cent. 

She continues: “Landlords looking to secure a five-year fixed rate in the brackets between 65 and 80 per cent LTV will find that the average five-year fixed rates in these tiers fell month-on-month, which is great news for those hoping to protect themselves from potential future rate rises with the stability of a mid-term fixed rate deal. 

“Those who took out a 75 per cent LTV five-year fixed rate in 2017 and are looking for an equivalent deal now will find that, at 3.19 per cent, the average rate is 0.70 per cent lower now than when they secured their previous deal.”