BTL mortgage products surge while first-time buyers struggle

There’s a growing disparity between the mortgage options for landlords and first-time buyers in the UK with the number of buy to let mortgage products rising by 8.8% in the last quarter.

But the number of products for first-time buyers dropped by 3.4%.

That’s according to research from Octane Capital which analysed the current availability of mortgage products across the market and how it has changed for different types of borrowers.

The lender found that first-time buyers have the least choice, with only 595 products on offer – representing 7% of the total market.

In contrast, landlords have access to 1,889 products, accounting for 17% of the market.

‘A growing level of buyer confidence’

Octane’s chief executive, Jonathan Samuels, said: “Generally speaking, there has been a growing level of buyer confidence since the Bank of England held the base rate for a third consecutive time in December.

“That said, while the general expectation is that interest rates will fall this year, many lenders are continuing to tread with caution, and this is why we’ve seen a reduction in the number of mortgage products available to both first-time buyers and home movers.”

He added: “This is because those looking to buy for the first time, or borrow more to move further up the ladder, are often more susceptible to the potential affordability issues caused by higher mortgage rates.

“However, this reduction in product availability hasn’t been seen across the entire sector and buy to let investors, in particular, are currently benefiting from an increased level of choice when borrowing.”

Home movers have seen a decline in mortgage products

The report also showed that home movers have seen a slight decline in the number of mortgage products available to them, down 1% in the last three months.

However, they still have a much higher level of choice than first-time buyers, with 3,000 products to choose from – 35% of the market.

Remortgagers have the most choice, with 37% of the market and an increase of 1% since October.