Buy to let mortgage competition is showing no signs of stopping, thus giving one of the few pieces of good news for agents and landlords alike.
Research from independent market monitor Moneyfacts shows that the average two-year fixed BTL rate has fallen by 0.31 per cent in one year, and 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 BTL mortgage products now available has risen from 1,408 in January this year to 1,610 now – a rise of around 15 per cent in just six months.
“The buy to let market has seen turbulent times with significant tax changes, tougher affordability rules and more changes to come into force in September. 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” says Charlotte Nelson of Moneyfacts.
“Providers are now starting to gear up for further regulatory changes. From September 30 lenders will have to apply stricter standards for landlords with four or more properties. Given that 89 per cent 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” Nelson adds.
“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.”