Mortgage rates HMO

Buy-to-let mortgage market is booming for first-time landlords

First-time landlords are enjoying a surge in the number of mortgages to choose from as the number of deals available to them has increased by a massive 118% over the past five years. 

In July 2014, there were 645 mortgage deals available to first-time landlords. Fast forward to July 2019 and landlords looking to get into the buy-to-let (BTL) business have 1,405 to choose from, according to data from

While the Prudential Regulation Authority (PRA) has introduced stricter lending criteria and the phasing out of tax relief on mortgage payments by 2020, it does not seem to have held prospective first-time landlords or lenders back. In the last year alone, lenders have launched 137 new products to attract potential landlords to the buy-to-let market.

Lower interest rates have also bolstered the market

According to Moneyfacts, the average interest rates available on first-time BTL deals have also fallen over the past five years. Back in 2014, a first-time landlord would be looking at a rate of 4.01% on a two-year fixed rate mortgage. Today, the average two-year fixed rate is 2.97%, and five-year fixes have also fallen from 4.68% to 3.52%.

Rachel Springall, finance expert at Moneyfacts, said: “Entering the buy-to-let market hasn’t been without its hurdles, and almost two years since the PRA introduced rules expected to tighten lending, the move doesn’t seem to have shaken up lenders’ attitudes to attract first-time landlords.

“In fact, the number of deals available to these individuals has now boomed to a record high.”

While the expanding choice is good news for prospective landlords, Moneyfacts warns that “…the financial strain of recent tax changes may be starting to show on those who are currently invested in property, according to recent data from the Office of National Statistics”.

However, for prospective landlords undeterred by the regulatory changes, considering a longer fixed term of 5 years to take advantage of the current low rates will offer peace of mind and financial stability for an extended period.

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