Demand for buy-to-let mortgages is booming, as confidence in the sector as an investment continues to grow and rents rise, according to data analyst Moneyfacts.co.uk.
Buy-to-Let Mortgage Market is Thriving
Mortgage lenders are therefore taking advantage of soaring demand and are competing in an attempt to attract new investors.
Figures from Moneyfacts reveal that lenders are doing all they can to entice new borrowers. The average rate has dropped significantly, while the amount of deals with no arrangement fee has more than doubled in just 12 months.
Finance Expert at Moneyfacts, Charlotte Nelson, comments on the findings: “The BTL [buy-to-let] market is clearly booming, with rents at a high and BTL mortgage rates dropping to historic lows, there is great potential for prospective landlords.
“The finding that the average two-year fixed rate has fallen by 0.37% in just one year is particularly good news for older borrowers who are looking to access their pension pots to invest in bricks and mortar.
“However, the Bank of England has recently gained new powers to regulate the buy-to-let market, which may mean that the end is nigh for these low-cost deals. Potential landlords looking for a fixed rate should therefore act fast to ensure they are not disappointed.”
She continues: “Future legislative changes to the BTL market could also mean potential profits will fall, so investors need to keep an eye on any announcements to ensure BTL will still be profitable for them.
“The increase in deals with no fee is a sign that BTL lenders are trying to diversify and offer borrowers more choice than ever before. However, borrowers still need to weigh up the true cost of a mortgage to ensure the best deal is secured. Anyone thinking about entering this sector would be wise to seek the advice of an independent financial adviser to see if BTL really is the best place for their investment.”1
If you are considering becoming a buy-to-let landlord, or have rental properties already, keep up to date with the latest landlord law, finance news and goings on in the property market on LandlordNews.co.uk.