Home » Uncategorised »
Buy-to-Let Mortgage Choice Hits Post-Financial Crisis High
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The number of buy-to-let mortgage products on the market has hit a post-financial crisis high, according to analysis by Moneyfacts.co.uk.
While the tax and legislative changes imposed on the buy-to-let sector over the past few years have increased the pressure felt by landlords, and even forced some out of the market altogether, the research shows that the amount of buy-to-let mortgage products currently available is at a post-financial crisis peak.
Today, landlords have the choice of 2,162 buy-to-let mortgage products, meaning that the number of deals has not been higher since October 2007, when 3,305 products were available.
Moneyfacts’ study also found that the average rate on a two-year fix increased from 2.96% in March 2017 to 3.12% today, while a typical five-year fixed rate deal dropped from 3.77% to 3.61% over the same period.
Darren Cook, the Finance Expert at Moneyfacts, says: “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.
“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 buy-to-let 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 buy-to-let mortgage rate has increased by 0.20% to 3.12% since September 2018 and the average five-year fixed rate has increased by 0.15% over the same period.”
He continues: “As there appears to have been no sustained increases in interest SWAP rates since September 2018, a strong argument can be made that the recent increases to buy-to-let mortgages interest rates have been a result of buy-to-let mortgage providers attributing a little more to risk into their product rates, due to uncertainty over future economic conditions.
“The disparity in the direction of movement between buy-to-let and residential interest rates may be due to the way these two types of lending are primarily assessed. Buy-to-let 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.”
