Huge fall in number of available mortgages for landlords
The Covid-19 pandemic has massively impacted the choice and cost of deals in the buy-to-let market over the past month, according to Moneyfacts.
The financial information provider reported a fall of 1,304 buy-to-let products in the market compared to the start of March 2020.
Product choice for borrowers with a modest 20% deposit has plummeted on both two- and five-year fixed deals by 122 and 134 products respectively. There are now fewer than 40 deals available up to 80% of the property’s value.
Interest rate rise
Average interest rates on fixed buy-to-let mortgages have risen across the board too.
For borrowers who have a 40% deposit, rates on both two- and five-year fixed rates rose by 0.35% and 0.31% respectively since last month, said Moneyfacts.
Landlords with just 20% upfront have seen two-year deals rise by 0.20% and five-year deals by 0.21%.
Rachel Springall, finance expert at Moneyfacts, said: “It is clear as day to see how the virus pandemic and isolation rules have led to a huge shake-up in the choice and cost of buy-to-let mortgages.
“Thankfully, lenders will allow borrowers to defer their mortgage repayments for three months as of last month, but landlords must act now and check online to see how tenants falling onto universal credit or local housing allowance could impact their rental cover ratio.
“As interest rates rise, landlords would be wise to move quickly to remortgage.”