Every Friday, we take an overview of the mortgage market with industry experts and round up the best rates with the guys from Moneyfactscompare. This week, we are focusing on buy-to-let mortgages… 

Landlords have more mortgage options than ever after the number of buy-to-let products available hit a record high. 

There are more than 4,000 deals on the market, with the majority of them being five-year fixes.

The average five-year fixed rate is at its lowest point since last October, while two-year fixed rates have hit a low not seen since 2022. 

Several lenders cut buy-to-let rates this week. Here are some of the most significant changes: 

• Newcastle Building Society reduced fixed rates by up to 0.15%
• Skipton Building Society made cuts of up to 0.5%
• Fleet Mortgages, Molo Finance, Hinckley & Rugby Building Society and Principality Building Society also made cuts, albeit by small margins, of up to 0.1%

Here are the cheapest deals available… 

Moneyfacts also picks out “best buys” that look beyond rates to take into account fees and incentives…

Challenge of new laws

“Lower buy-to-let rates might create a positive sentiment for new and existing landlords, however, there will be immense pressure on some to turn around a profit in the future,” Rachel Springall, finance expert at Moneyfacts, said. 

“Investors typically expect to make better profits if investing in multiple properties, but by the same notion, it can open them to more risk if property prices plummet and they are locked into a mortgage or have no tenant for an extended period of time. 

“Landlords coming off a low rate fixed deal and needing to refinance will see increasing rents as the easiest way to boost margins. Landlords will also need to keep in mind the Renters’ Rights Bill which is expected to come into force either later this year or in 2026. 

“The new laws include abolishing section 21 evictions and fixed-term tenancies, but also new rules on making rent increases. The legislation is designed to protect millions of renters, giving them more security, but understandably this might be the final straw for existing landlords, leading to them exiting the sector.” 

What about the rest of the market? 

Lenders have been under pressure to get the housing market moving, and to help buyers get on the property ladder. 

Nationwide has become the latest lender to make changes to push that agenda, allowing first-time buyers to purchase new build homes with a 5% deposit.

Under its Helping Hand scheme, it is also allowing people to borrow up to six times their annual income. 

The Financial Conduct Authority has been exploring further changes that could be made to mortgage rules to help first-time buyers and the self-employed own a home. 

It has launched a discussion paper on the potential benefits and risks that changing rules around the market could bring, so we will wait to see the outcome of that in the near future.