New EICR to cover any changes made by outgoing tenant?10:00 AM, 4th May 2021
About 2 weeks ago 95
First-time landlords looking for a buy-to-let mortgage will find there is even more choice available than ever before. There are currently 1,474 buy-to-let mortgages available to first-time landlords, an increase of 297 in the last 12 months.
The research from Moneyfacts.co.uk also confirmed that the average fixed rates for two and five year buy-to-let mortgage deals had also seen a slight reduction from October 2018.
As the Government phases out the tax relief on mortgage interest payments by April 2020 and the market adheres to stricter lending criteria rules introduced by the Prudential Regulation Authority, borrowers will be pleased to find that lenders are still working hard to expand their range to cater for prospective landlords.
|Buy-to-let market analysis – First-time landlord products|
|Oct 2014||Oct 2018||Jul 2019||Oct 2019|
|Average two-year fixed rate||3.83%||2.89%||2.97%||2.87%|
|Average five-year fixed rate||4.45%||3.43%||3.52%||3.38%|
|Number of overall products||660||1,177||1,405||1,474|
Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:
“It’s encouraging to discover that first-time landlords have a huge choice of deals right now, particularly during a time of economic uncertainty. However, landlords will need to keep a close eye on their projected profit margins, especially as tax relief on mortgage interest will be scrapped in April 2020.
“Landlords are already feeling the squeeze to make a decent profit within the buy-to-let sector, with the average landlord left with just £2,000 from an annual return of £13,000 once landlord costs are paid, according to recent research by lettings platform Howsy.
“So, while lenders work hard to accommodate prospective investors with an array of buy-to-let options, the costs of managing a property or concerns about a volatile property market could deter some from investing in this arena altogether. In fact, according to the Land Registry, house price growth slowed to 0.70%, the lowest in almost a decade.
“As it is a mere few months until tax reliefs are scrapped, it’s vital consumers seek independent advice to work out whether buy-to-let is a viable investment opportunity for them and to be made aware of upcoming changes facing the market.”
Research released this week from Paragon Bank showed that only 8% of landlords expect to buy a property in the next quarter and the gap between those intending to sell and those intending to buy has widened to 15%.
This system can be used to source both residential and buy to let mortgages. It is updated live by mortgage lenders and even includes mortgage products available exclusively via broker networks. You can compare total costs of mortgages, including fees, over any period of time.
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