Buy-to-let product numbers soar as rates plateau
Faced with these changes, it is likely that competition among providers may start to ebb initially, with the providers instead focusing on their core range and getting their criteria up to date.
Buy-to-let mortgage rates still falling, but at a slower pace, research from Moneyfacts shows.
The average two-year fixed BTL rate has fallen by 0.31% in 12 months but by just 1 basis point in 2017, from 2.92% in January to 2.91% in July.
Even though the pace of the fall has slowed in recent months, the market has now recovered from the significant drop in products that was seen at the start of this year.
The number of products available on the market has risen from 1,408 at the start of the year to 1,610 today.
Charlotte Nelson, Finance Expert at Moneyfacts, said: “The BTL market has seen some turbulent times, with significant tax changes, tougher affordability rules and more changes to come into force in September. It is little wonder many thought the BTL mortgage market might show signs of strain. And yet, rates have continued on a downward path. Since the introduction of new regulation in January, however, the pace of the reductions has slowed considerably.
“Product numbers have been bolstered since the dramatic fall that occurred in January, giving landlords looking for a mortgage deal today more choice. This shows that after the initial shock of the changes in January, providers are keen to recover and keep the market buoyant.
“Providers are now starting to gear up for further regulatory changes. From 30 September, lenders will have to apply stricter standards for landlords with four or more properties. Given that 89% of the mortgage deals on the market today are available for borrowers with four or more properties in their portfolio, these changes will affect a large chunk of the market.
“Faced with these changes, it is likely that competition among providers may start to ebb initially, with the providers instead focusing on their core range and getting their criteria up to date. With the added uncertainty in the economy, landlords looking for a mortgage deal are likely to face a bumpy road for a while. Anyone unsure of their options should seek out independent financial advice.”
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