According to data from Moneyfacts.co.uk, the buy-to-let sector has bounced back from market turmoil, with product choice reaching levels not seen since August 2022.
The overall availability of buy-to-let products, including fixed and variable rates, has risen to 2,400 options, up from just 988 in October 2022.
Although average fixed rates have fallen month-on-month for both 2- and 5-year terms, landlords who are coming off a fixed deal will find that the latest rates are more than 2% higher.
Rachel Springall, a finance expert at Moneyfacts.co.uk, said that it is encouraging to see buy-to-let product choice gradually recover from the fiscal announcement shock.
The drop in average buy-to-let rates is less subdued than seen within the residential mortgage sector, but lenders have made moves to entice new business despite some investors’ concerns surrounding rental income margins.
However, as both the average 2- and 5-year fixed rates sit above 5%, compared to around 3% a year ago, it’s clear that landlords are likely to see their monthly repayments much higher than they anticipated.
Springall also noted that there may be some landlords looking to sell up this year due to the rise in interest rates, tax changes for holiday lets and CGT, or even EPC requirements, which all dampen profit margins or investment returns on the sale of a property.
She advises landlords to seek advice to ensure that it is the right time to commit to a deal, as interest rates are only part of the decision-making process when entering a buy-to-let investment.
