The number of buy-to-let mortgages available for first-time landlords has soared to record levels meaning borrowers can currently benefit from more choice and lower rates.
Figures from Moneyfacts show the number of deals in this market have increased by 13% since the start of the year despite the major uncertainties caused by regulatory and tax changes in the buy-to-let market.
It means new landlords have the choice of more than 1,260 products and can benefit from an average rate on a two-year fixed-rate first-time deal of 2.83%, which is a drop of 0.36% over the last two years.
Charlotte Nelson, finance expert at Moneyfacts, said it was great news that first-time landlords had more choice than ever before, with the number of products available to them in the buy-to-let mortgage market increasing by 339 in just two years.
She added: “Despite market uncertainty, providers are certainly not shying away from offering this risky group deals. Providers know all too well that many borrowers on their mortgage books will be coming to the end of their term and reassessing their deal, so they need to attract new business.
“As such, they’re enhancing their ranges and offering these deals to entice those customers who are new to the market, thereby breathing new life into their mortgage book.”
First-time landlord market doubles
The raft of regulatory and tax changes introduced recently include the phasing out of mortgage interest relief and the Prudential Regulation Authority (PRA) demands for tougher underwriting standards and affordability assessments.
But despite these changes, which were expected to put many people off becoming landlords, there are some who clearly remain undeterred.
Indeed, last week Accord Buy-to-Let announced it would be expanding its offering for first-time landlords after it noticed applications for those taking an initial step into the market had doubled in the space of a year.
Nelson said this was of little surprise since many still consider bricks and mortar a safe bet. “With savings rates low, many are looking to get better returns elsewhere,” she said.
“Also while rents are high and mortgage rates for first-time landlords are still falling, the potential for a decent return is high.”
She added: “Of course, buy-to-let is not without its risks, and anyone seeking to enter this sector would be wise to seek the advice of a financial adviser to see if this is the best route for them.”
