Buy-to-let rates are following homeowner mortgage trends to their lowest level ever recorded, data from Moneyfacts has revealed.
The average buy-to-let borrowing is currently at the lowest level ever recorded - just 3.82 per cent across all terms - and the number of deals in the sector has also risen from 757 to 811 over one month.
In February 2014 the buy-to-let rate was 4.22 per cent, in February 2013 it was 4.68 per cent and in February 2012 it was 5.03 per cent.
The buy-to-let variable rate is 3.63 per cent today and it was 4.17 per cent this time last year, 4.43 per cent two year’s ago and 4.46 per cent three year’s ago.
Moneyfacts said that these changes are due to a thriving market, as lenders increasingly re-introduce competition across mortgage deals.
The firm stated that this time last year there were 2,662 deals for borrowers looking for loan-to-values ranging from 100 per cent to 75 per cent, but now the number has increased to 2,943.
Moneyfacts also explained that as lenders loosen up after years of risk aversion, the need to restrict borrowing to only those with high deposits or equity from previous homes has lessened, with the number of restrictive at 60 per cent, 65 per cent and 70 per cent and below deals declining from 1,021 to 845.
Earlier this month, data from the Council of Mortgage Lenders revealed that, due to a variety of funding sources which have enabled lenders to raise capital at “exceptionally low cost”, fixed rates and trackers are at record lows.
In it’s latest news and views publication, the industry body pointed out that its regulated mortgage survey showed last November the average new tracker mortgage rate fell to 1.96 per cent – the first time that it has ever dipped below 2 per cent.
It’s a similar picture for fixed-rate borrowers, with some lenders offering the “lowest long-term” rates the market has ever seen, the CML said.
Sylvia Waycot, editor at Moneyfacts, said: “When you consider how dire savings rates are it is hardly surprising that buy-to-let is proving popular with investors, and this is likely to increase once the rules relaxing the drawdown of pension pots in April come to fruition.
“Having had several years of the bank door being firmly shut to only the richest of borrowers, doors appear to not only be open but actively entice you in off the street with offers of fantastic rates.”