Are We Seeing The Revival of the Buy-to-Let Mortgage Market

Signs of a Remarkable Recovery as Product Choice Soars!

We have exciting news to share with landlords. The buy-to-let mortgage market has shown remarkable resilience following the challenging times triggered by the disastrous mini-Budget.

According to Moneyfacts, an esteemed independent mortgage monitor, the range of product choices available to landlords has surged to levels not witnessed since August 2022. This resurgence in the market is nothing short of encouraging, with overall availability of fixed and variable BTL products improving month after month. Today, landlords can explore a staggering 2,400 options, marking the highest count since July—an impressive sign of recovery.

Furthermore, average fixed rates have seen a steady decline over the past month, both for two-year and five-year fixed terms. However, it is important to note that compared to average rates, those transitioning from a five- or two-year fixed deal may encounter rates that are more than 2.0 per cent higher.

Rachel Springall, from Moneyfacts, shares her insight on this positive trend: "It is indeed encouraging to witness the gradual recovery of buy-to-let product choices following the shockwaves caused by the fiscal announcement. The availability of deals for landlords had plummeted, leading to a surge in both average two-year and five-year fixed rates, reaching 6.0 per cent towards the end of 2022. Fortunately, both rates have gradually dipped below this level."

Thanks to consecutive months of growth, landlords now have an extensive selection of 2,400 deals to choose from—an impressive jump from just 988 deals in October 2022.

While the decline in average buy-to-let rates may appear more subdued compared to the residential mortgage sector, lenders have actively pursued measures to attract new business, even amidst some investors' concerns regarding rental income margins.

With average two- and five-year fixed rates currently above 5.0 per cent, compared to around 3.0 per cent a year ago, it is clear that landlords may face higher monthly repayments than initially anticipated. Some may even consider selling their properties this year due to the rise in interest rates, tax changes for holiday lets and CGT, or the additional requirements imposed by EPC regulations.

Amidst these developments, landlords may choose to wait for further decreases in fixed mortgage rates or opt for a tracker mortgage, offering greater flexibility for future deal transitions. However, it is crucial to remember that interest rates are only one aspect of the decision-making process when embarking on a buy-to-let investment. Whether you are a new or existing landlord, seeking professional advice is always wise to ensure the optimal timing for committing to a deal.

At More Financial, we are here to support you throughout this journey, providing expert guidance tailored to your unique circumstances. With our comprehensive knowledge and personalised approach, we can help you make informed decisions and seize the opportunities presented by the revival of the buy-to-let mortgage market.

Reach out to us today to discover how we can assist you in maximising your investments and achieving your financial goals.

Let's ride the wave of this recovery together!