More mortgage options for first-time landlords
The proportion of buy-to-let mortgages catering for first-time landlords has increased over the last year, with 65% of buy-to-let deals on offer to landlords entering the market, according to Moneyfacts.
The financial information provider said this is despite the fact that overall availability has fallen across the buy-to-let (BTL) market due to the impact of the Coronavirus pandemic.
But the cost of mortgages has risen for those investing for the first time.
Average fixed rates for first-time landlords have increased, with the two-year fixed rate average climbing 0.30% year-on-year and the five-year equivalent rising by 0.35% over the same period.
These increases are steeper than those seen in the wider market with Moneyfacts suggesting that ‘lenders may be pricing risk into deals for untested landlords’.
Eleanor Williams, finance expert at Moneyfacts.co.uk, said: “At 3.10% and 3.66% respectively, the two and five-year fixed rate averages for FTLs have increased by 0.30% and 0.35% when compared to February 2020. Additionally, these increases are more significant than those seen in the overall BTL average rates, where the equivalent averages for all landlord types rose by 0.22% and 0.12% respectively.
“Therefore, would-be first-time landlords may wish to consider their options carefully to ensure they are securing the best possible deal for their particular circumstances, as although these averages are higher, there are still competitive deals available.”