Mortgages

First-time landlord products see October surge

297 more first-time landlords products have entered the market over the past 12 months.

Rozi Jones
|
1st October 2019
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"Landlords will need to keep a close eye on their projected profit margins, especially as tax relief on mortgage interest will be scrapped in April 2020."

Mortgage products for first-time landlords have reached a new high and seen the biggest year-on-year leap for October ever recorded, according to new data from Moneyfacts.

297 more first-time landlords products have been launched over the past 12 months, with the previous high seen in 2015 where the market grew by 226 deals.

In July 2019, research from Moneyfacts confirmed that there were 1,405 deals overall available for first-time landlords. This figure then rose to 1,431 a month thereafter and today has grown to 1,474, a new high.

Rachel Springall, finance expert at Moneyfacts, said: “It’s encouraging to discover that first-time landlords have a huge choice of deals right now, particularly during a time of economic uncertainty. However, landlords will need to keep a close eye on their projected profit margins, especially as tax relief on mortgage interest will be scrapped in April 2020.

“Landlords are already feeling the squeeze to make a decent profit within the buy-to-let sector, with the average landlord left with just £2,000 from an annual return of £13,000 once landlord costs are paid, according to recent research by lettings platform Howsy.

“So, while lenders work hard to accommodate prospective investors with an array of buy-to-let options, the costs of managing a property or concerns about a volatile property market could deter some from investing in this arena altogether. In fact, according to the Land Registry, house price growth slowed to 0.70%, the lowest in almost a decade.

“As it is a mere few months until tax reliefs are scrapped, it’s vital consumers seek independent advice to work out whether buy-to-let is a viable investment opportunity for them and to be made aware of upcoming changes facing the market.”

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