Buy to Let

Landlord mortgage numbers rise, but rates are up too

Christina Hoghton
Written By:
Christina Hoghton

The number of buy-to-let deals was slashed in 2020 but numbers are steadily growing back

For the fifth month in a row, the availability of buy-to-let mortgages has continued to improve, with 2,333 products available, said Moneyfacts.

The financial information provider said this means the sector has recovered to 81% of pre-pandemic levels and now offers the highest number of products seen since last March, providing landlords with a greater level of choice.

But, while there are now more mortgages for landlords, average rates have risen too.

Rates up

The average two-year fixed rate is 0.28% higher year-on-year, and at 3.05% is the highest recorded since June 2019.

The average five-year fixed rate is 3.41%, up 0.17% compared to a year ago and at its highest level since September 2019, when it reached 3.44%.

Moneyfacts also noted that the proportion of fee-free buy-to-let fixed rates has also fallen in the last year, although cashback incentives are up.

Eleanor Williams, finance expert at Moneyfacts.co.uk, said: “As the level of product choice has returned, rates have also continued to climb, with both the average two and five-year fixed rates for all LTVs higher than the same rates year-on-year.

“The only LTV tier where average fixed rates did not increase this month was at 60% LTV, where both the two and five-year average fixed rates fell by 0.38% and 0.27% respectively, which may be good news for those with 40% equity or deposit.

“It is important to note though that these are averages, and therefore while representative of the market as a whole, there are some very competitively priced products available, with some – depending on LTV and criteria – available at below 2%. Therefore, those who are hoping to refinance or take on a new deal would do well to shop around.”