Funding for buy to let investment plummets as wider economy tanks

A new analysis claims to show how difficult it has become for buy to let investors to secure finance as a result of the UK’s wider economic problems. 

Octane Capital’s analysis shows that the number of buy to let mortgage products on offer has fallen by 51.1 per cent in the past year, down from 3,264 in November 2021, to 1,595 in November 2022. 

Adding to the trouble is the fact that the average rate being offered on all buy-to-let products has increased by 2.1 per cent in the past year to currently sit at an average of 3.09 per cent.

As a result, the average monthly repayment for landlords has climbed from £656 to £917; an increase of 39.7 per cent.

With interest-only mortgages, the average monthly payment has increased by a remarkable 242.8 per cent to a high of £493 per month. 

Looking specifically at five-year fixed mortgages, rates have climbed from 1.39 to 4.89 per cent. This means the average monthly full payment has increased by 60.9% while interest-only payments are up 286.4 per cent.

Octane Capital chief executive Jonathan Samuels says: “The reduction in product choice for buy-to-let mortgages has been influenced largely by a consistent string of Bank of England interest rate hikes which has led to many lenders pulling their buy-to-let range. 

“However, with stability gradually returning to the market, we fully expect 2023 to bring with it a far more settled market for landlords and buy-to-let investors.”