Interest rates on buy-to-let mortgages may be on the up but landlords are benefiting from a greater range of products than the were before the pandemic.
The average rate on a two-year fixed deal for landlords has risen for the third consecutive month and now stands at 3.41%, which is the highest level since September 2015, according to Moneyfacts.co.uk.
Since December 2021, when the Bank of England made its first interest rate hike in recent times, the average two-year fixed buy-to-let deal has risen by 0.51% – highlighting the impact the base rate hikes have had on prices.
The rate rises come amid warnings of an ongoing disparity between supply and demand. Indeed, the latest Propertymark Private Rented Sector report shows limited supply of rental property available whilst demand from tenants was growing.
Letting agents are reporting 93 new applicants registering per branch in March, compared to 78 in February.
In the meantime, according to Moneyfacts, landlords were benefiting from a greater choice of mortgages than before the pandemic.
Although there was a small month-on-month dip in the number of products available to landlords, there were over 1,000 more deals available now than in May 2021 and numbers are above pre-pandemic levels.
Eleanor Williams, finance expert at Moneyfacts.co.uk, said: “Product availability in the buy-to-let sector remains strong, which will be positive news for landlords who saw volumes fall significantly during 2020. There are now 3,374 deals on offer, considerably above the number we recorded in March 2020 (2,897).”
She added: “Landlords may have a greater choice of products, but the average rates on offer are on the increase.”
Deals for remortgaging landlords
Eleanor said landlords interested in slightly longer-term fixed rates would find that at 3.56%, the equivalent five-year fixed rate was lower than its equivalent from May 2017 (3.68%)
“So those with maturing five-year fixed rates may be able to secure a more competitive rate now than they did then,” she added.
| BTL Market Analysis (source: Moneyfacts.co.uk) | |||||
| Product numbers | May-17 | May-20 | May-21 | Apr-22 | May-22 |
| BTL product count – fixed and variable rates | 1,558 | 1,455 | 2,302 | 3,435 | 3,374 |
| All 85% LTV BTL products – fixed and variable rates | 10 | 0 | 12 | 80 | 79 |
| Average rates | May-17 | May-20 | May-21 | Apr-22 | May-22 |
| BTL two-year fixed – all LTVs | 2.93% | 2.51% | 2.99% | 3.22% | 3.41% |
| BTL two-year fixed – 85% LTV | 4.89% | N/A | 5.52% | 4.79% | 4.80% |
| BTL five-year fixed – all LTVs | 3.68% | 2.94% | 3.35% | 3.42% | 3.56% |
| BTL five-year fixed – 85% LTV | 5.29% | N/A | 5.72% | 4.91% | 4.93% |
| Data shown is as at first working day of month, unless otherwise stated. Source: Moneyfacts.co.uk | |||||
