"With stability gradually returning to the market, we fully expect 2023 to bring with it a far more settled market for landlords and buy-to-let investors."
Buy-to-let landlords are facing a tougher time securing finance due to a significant reduction in product choice and rising mortgage rates, according to new research from Octane Capital.
Octane Capital’s analysis shows that the number of buy-to-let mortgage products on offer has fallen by 51.1% in the past year, down from 3,264 in November 2021, to 1,595 in November 2022.
Adding to the trouble is the fact that the average rate being offered on all buy-to-let products has increased by 2.1% in the past year to currently sit at an average of 3.09%.
As a result, the average monthly repayment for landlords has climbed from £656 to £917; an increase of 39.7%.
With interest-only mortgages, the average monthly payment has increased by a remarkable 242.8% to a high of £493 per month.
Looking specifically at five-year fixed mortgages, rates have climbed from 1.39% to 4.89%. This means the average monthly full payment has increased by 60.9% while interest-only payments are up 286.4%.
CEO of Octane Capital, Jonathan Samuels, commented: “The reduction in product choice for buy-to-let mortgages has been influenced largely by a consistent string of Bank of England interest rate hikes which has led to many lenders pulling their buy-to-let range.
"However, with stability gradually returning to the market, we fully expect 2023 to bring with it a far more settled market for landlords and buy-to-let investors.
"At Octane Capital, we have already set plans into motion with a view of increasing our buy-to-let offering in the new year and as a greater level of choice returns, the nation’s landlords will be able to better negotiate the landscape when borrowing.”
