Less choice for landlords as 80% LTV market shrinks

Less choice for landlords as 80% LTV market shrinks
Credit: Jason Alden/Bloomberg

The number of buy-to-let mortgages in the 80 per cent LTV tier has dropped, resulting in less choice for landlords with lower levels of equity or deposit.

Data from comparison site Moneyfacts showed the amount of BTL products at 80 per cent LTV was down to 74 in November, a mere 20 per cent of what was available before the first lockdown.

At the beginning of March there were 368 products for landlords to choose from in that segment and since the beginning of November alone, 25 deals have been pulled. This adds to the higher tier deals that were already pulled over the course of the pandemic.

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Additionally, the average two-year fixed rate at 80 per cent LTV increased by 0.6 percentage points between March and November, one of the steepest increases of all tiers over the period.

Eleanor Williams, finance expert at Moneyfacts, said: “According to our data, 80 per cent is currently the highest LTV available to landlords since the handful of 85 per cent LTV deals that had come back to market were withdrawn in mid-October.

“It may therefore be disappointing to see that the choice of products in the 80 per cent LTV tier has shrunk by 25 deals since the start of November, with 74 now on offer and resulting in less choice for those landlords with lower levels of equity or deposit.”

Commenting on the fewer number of lenders in the 80 per cent LTV market, Chris Sykes, mortgage consultant at Private Finance, said: “It is a high risk market as this is traditionally the maximum a lender will go to on a buy-to-let, although there were a few 85 per cent LTV deals.

“Most people opt to put down at least a 25 per cent deposit due to the much more attractive rate that this allows.”

Indeed, Ms Williams described the average rate increases at 75 per cent LTV “less severe”, as the two- and five-year fixed rate rose by 0.18 and 0.05 percentage points respectively between March and November.

Mortgage availability in the 75 per cent LTV tier also increased by 52 products since October.

Product numbers in the 60 per cent LTV tier meanwhile, dropped by 100 from July.

But Ms Williams noted that five additional products at 60 per cent LTV had been launched since the beginning of November.

She added: “It may possibly be the case that as some lenders have increased the maximum LTV tiers they will lend in, that the inflated number of 60 per cent LTV products has reduced, as we see that product availability has increased by 52 in the 75 per cent LTV tier since October, with 32 of those deals becoming available since the start of November.”

Buy-to-let mortgage market analysis

Product numbers

 Nov-19Mar-20Jul-20Oct-20Nov-2027 Nov 20
BTL product count - fixed and variable rates2,6112,8971,7381,8251,7721,792
All 80% LTV BTL products - fixed and variable rates282368771289974
All 75% LTV BTL products - fixed and variable rates1,0321,080616566586618
All 60% LTV BTL products - fixed and variable rates360373414353309314

Average rates

 Nov-19Mar-20Jul-20Oct-20Nov-2027 Nov 20
BTL two-year fixed - all LTVs2.96%2.77%2.61%2.85%2.89%2.90%
BTL two-year fixed - 80% LTV3.62%3.56%3.18%3.97%4.07%4.16%
BTL two-year fixed - 75% LTV2.93%2.80%2.72%2.84%2.92%2.98%
BTL two-year fixed - 60% LTV1.96%1.89%2.28%2.52%2.53%2.56%
BTL five-year fixed - all LTVs3.40%3.24%2.97%3.22%3.28%3.26%
BTL five-year fixed - 80% LTV4.01%3.98%3.82%4.27%4.55%4.34%
BTL five-year fixed - 75% LTV3.43%3.33%3.14%3.24%3.33%3.38%
BTL five-year fixed - 60% LTV2.37%2.31%2.65%2.90%2.83%2.86%

Data shown is as at first working day of month, unless otherwise stated. Source:

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