There are more buy-to-let products available on the market than at any time in nearly 10 years, new research shows.
According to data from Moneyfacts, there are currently 1,725 buy-to-let products available compared to 1,339 a year ago.
Charlotte Nelson, finance expert at Moneyfacts, said: “The buy-to-let market has had an understandably bumpy ride of late, considering all the regulation and tax changes it has had to contend with.
“The market has clearly recovered from the tougher affordability rules that were put in place on 1 January, when it saw a dramatic drop in the number of products available to landlords. Since then, the number of deals on offer has gone from strength-to-strength.
“Despite reduced buy-to-let activity in the first quarter of this year, competition among lenders remains high as providers fight to retain their standing in a diminished market. As a result, rates have also fallen, with the average two-year buy-to-let fixed rate down from 2.91% in August to 2.86% in September and another record low. This leaves borrowers looking for a buy-to-let mortgage today in a good position.”
The Prudential Regulation Authority is bringing in tougher rules for portfolio landlords – those with four or more rental properties – on 30 September.
It expects firms to adopt a more specialist underwriting process to reflect greater complexity of lending to portfolio landlords.
Nelson said that it was still uncertain how providers will choose to react to the changes, but product numbers could climb as providers start to target their products to the two different types of borrower. However, despite this increased choice rates might not improve.
“The extra pressure on the buy-to-let market could be a turning point, with the competition that is currently alive and well amongst providers perhaps starting to ebb as they shift their focus to ensuring the new regulation is followed,” Nelson said.
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