10:33 AM, 29th November 2022, About 2 months ago 1
Landlords searching for a new BTL mortgage will find product choice within the lending sector is recovering, research reveals.
According to an analysis by Moneyfacts.co.uk, the overall buy-to-let product availability, both fixed and variable, has risen by more than 700 options since the start of October,
However, there are 300 fewer deals than at the start of September and the average fixed rates rose over the same period, both over a two-year or five-year fixed term.
Rachel Springall, a finance expert at the platform, said: “The buy-to-let sector has faced notable market turmoil, so it’s positive to see product choice gradually returning since the start of last month.
“A rise in choice could indicate an encouraging sentiment across lenders that appear to be adjusting their ranges to cater to landlords searching for a new deal.”
Rachel says that the cost for locking into a new fixed deal has risen since the start of October, and the overall average BTL fixed rates across both two- and five-year terms sit above 6%.
She added: “So, despite product choice starting to return, landlords will be paying higher interest rates than if they secured a deal just eight weeks ago.
“There are high expectations that interest rates will come down in the weeks ahead, so it would not be too surprising if landlords wait a little longer before they refinance, particularly as we approach the end of the year.”
Rachel continued: “Prospective landlords assessing the potential returns by investing in buy-to-let may be concerned about their profit margins due to rising interest rates and the cost of living.
“Any investor will need to carefully balance their rental expectations amid rising costs as it is difficult to tell how investors could be impacted moving into 2023.
“However, since January 2020, rents have risen 19% across Great Britain, equating to an extra £2,351 a year for tenants, according to a study by Hamptons.
“It’s essential any potential borrower seeks independent financial advice before entering any arrangement to ensure it’s the right choice for them.”
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