Not only have the number of mortgages for landlords increased beyond the level experienced in March 2020, before the pandemic effects began to hit the market, but the 2,968 now on offer is the highest since October 2007 – before the financial crisis.
Moneyfacts said, at start of September, there were 71 more buy-to-let mortgages than there were on offer pre-pandemic in March 2020 (2,897).
What’s more rates were also falling. Indeed, the average overall two and five-year fixed buy-to-let rates have reduced this month by 0.03% and 0.04% respectively, said Moneyfacts.
At 2.94% the two-year fixed average is the lowest it has been since January (2.89%), and at 3.25% the five-year fixed equivalent is the lowest since December 2020 (3.25%).
Eleanor Williams, finance expert at Moneyfacts.co.uk, said: “As we pass the 25th anniversary of the first buy-to-let mortgages as we know them, our data gives landlords cause for positivity, as the number of products for them to choose from has risen by 153 this month, and at 2,968 is 1,162 higher than this time last year (1,806 Sep 2020).
“The resilience of this sector in the aftermath of a challenging 18-months is clear as choice now exceeds the number of deals available before the pandemic in March 2020 by 71 options.
“Further cause for celebration is that the interest charged on buy-to-let mortgages is falling.
“Compared to a year ago, on face value borrowers will notice average rates are higher today. However, the rates a year ago were driven by the impact of the pandemic and product availability was low – particularly in the higher LTV tiers where rates are generally higher due to pricing for risk.
She added: “As rental demand remains high, BTL could be a worthwhile investment and the rise in overall product choice and fall in average rates is positive.”
There was, however, a note of caution from Moneyfacts which pointed out landlords with smaller deposits to put down would not benefit from such generous rate decreases.
The data showed the maximum 85% loan-to-value (LTV) bracket had not only seen availability stall at 19 deals, but also the average two and five-year fixed rates on offer for landlords with just 15% equity or deposit were 0.88% and 0.44% above their September 2019 equivalent.
Eleanor said this indicated while lenders are competing for business, their eagerness did not to extend to the riskier end of the market yet.
| Buy-to-let market analysis (source: Moneyfacts.co.uk) | |||||
| Product numbers | Sep-19 | Mar-20 | Sep-20 | Aug-21 | Sep-21 |
| BTL product count – fixed and variable rates | 2,424 | 2,897 | 1,806 | 2,815 | 2,968 |
| All 85% LTV BTL products – fixed and variable rates | 32 | 32 | 16 | 19 | 19 |
| Average rates | Sep-19 | Mar-20 | Sep-20 | Aug-21 | Sep-21 |
| BTL two-year fixed – all LTVs | 2.97% | 2.77% | 2.84% | 2.97% | 2.94% |
| BTL two-year fixed – 85% LTV | 4.73% | 4.70% | 5.47% | 5.61% | 5.61% |
| BTL five-year fixed – all LTVs | 3.44% | 3.24% | 3.20% | 3.29% | 3.25% |
| BTL five-year fixed – 85% LTV | 5.39% | 5.34% | 5.64% | 5.83% | 5.83% |
| Data shown is as at the first working day of month, unless otherwise stated. Source: Moneyfacts.co.uk | |||||
