Buy-to-let  

First-time landlord deals reach record high

First-time landlord deals reach record high

First-time landlord deals are at a record high - rising by 13 per cent in 2018, according to figures released today.

Data from Moneyfacts showed the number of first-time landlord products rose from 1,123 in January 2018 to 1,268 in July.

The increase coincided with a drop in the average two-year fixed rate for these borrowers from 2.84 per cent to 2.83 per cent.

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The figures are part of a larger trend which has seen the number of first-time buy-to-let products rising from 929 in July 2016, an increase of 339.

Charlotte Nelson, finance expert at Moneyfacts, said lenders were looking to attract new business because many on their mortgage books would be coming to the end of their term and reassessing their deal.

She said: "Despite market uncertainty, providers are certainly not shying away from offering this risky group deals.

"They are enhancing their ranges and offering these extra deals to entice those customers who are new to the market, thereby breathing new life into their mortgage book."

The buy-to-let market has been in a state of flux for several months, prompted by changes to the tax regime and uncertainty surrounding Britain's departure from the European Union.

A report from the Intermediary Mortgage Lenders Association found net investment in buy-to-let property had fallen 80 per cent from £25bn in 2015 to £5bn in 2017.

But despite this Ms Nelson pointed out that Accord had seen the number of applications from aspiring landlords double over the last 12 months despite multiple regulations and tax changes for that demographic.

She said: "This is little surprise when many consider bricks and mortar as a safe bet. With savings rates low, many are looking to get better returns elsewhere.

"Also, while rents are high and mortgage rates for first-time landlords are still falling, the potential for a decent return is high."

She added: "However, potential investors should not get ahead of themselves. Since September 2017, they face checks and questions about their finances and will need to do their homework to ensure they get the best deal."

rachel.addison@ft.com