The average two-year and five-year fixed rates have fallen month-on-month and have remained below 6% since the start of 2024.
This time last year the average two-year fix for landlords was 6.40% according to Moneyfactscompare.co.uk. In April it had fallen to 5.52%, last month it was 5.35% and now the average rate is 5.24%.
It’s a similar story for five-year fixed rates which were at 6.32% in October last year and are now at 5.24%, the data showed.
Meanwhile, there is also more product choice for landlords with Moneyfactscompare revealing the number of both fixed and variable mortgages rising to the highest level in over two years. Indeed, just after the mini-budget when hundreds of mortgage products were pulled from the market there were 988 buy-to-let options. There are now 3,277.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “The buy-to-let market has had its fair share of challenges over the years, so landlords might find it encouraging to see fixed interest rates have been on the downward trend.
“There are also many more deals for borrowers to choose from, as lenders have been adjusting their ranges to accommodate demand.
“These are positive signs for prospective landlords, but there are numerous other factors to consider before taking the leap into the buy-to-let sector, not just the cost of a mortgage. The margin of profit from rental income may well be tighter than expected, but property is still regarded as a safe long-term investment.”
The data comes just a week after a report from Hamptons revealed how there had been a spike in the number of landlords opening limited companies from which to run their property portfolios.
And it also comes just days before the Chancellor Rachel Reeves is due to deliver the first Labour Budget. Mortgage experts say lenders will be awaiting the speech before making any more changes to their pricing.
Springall added: “Landlords will be on tenterhooks to see how the upcoming Budget will play out and lenders may remain fluid with their fixed rate pricing over the next few weeks, particularly due to volatility surrounding swap rates.
“Any borrowers concerned about their present situation would be wise to seek independent advice if they need support or indeed to navigate the latest deals if they are due to refinance in the next few months.”
