Mortgages

First-time landlord product choice hits record high

The number of deals available to first-time landlords has risen by 137 products in the past year alone.

Rozi Jones
|
1st July 2019
House money pound price growth
"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."

The choice of buy-to-let products for first-time landlords has risen to a record high, according to data from Moneyfacts.

Its figures show that the number of deals available to first-time landlords has risen from 645 in 2014 to 1,405 today, and by 137 products in the past year alone.

Additionally, average fixed rates have fallen over the past five years, with two-year fixed rates down from 4.01% to 2.97% and five-year fixes from 4.68% to 3.52%.

Five-year fixed rates have also fallen over the past year when the average rate stood at 3.94%, however two-year fixes have crept up over the past 12-months from a low of 2.83%.

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 rise in choice is good news to prospective landlords, 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. The ONS data highlighted that London private rental prices rose by 0.9% in the 12 months to May 2019, which is the highest annual growth seen since September 2017. This rise may well be linked to the staggered loss of mortgage interest tax relief, which in turn has seen landlords seeking out other ways to boost their income.

“First-time landlords concerned about potential rate rises may instead consider a five-year fixed deal, and thankfully rates have fallen in this sector since 2014. In fact, the average five-year fixed rate for first-time landlords has fallen by 1.16% since July 2014, down from 4.68% to 3.52% today."

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