BTL rates rise as availability recovers

BTL rates rise as availability recovers
Credit: Jason Alden/Bloomberg

The number of buy-to-let mortgages has continued to climb but rates are also rising, latest data from Moneyfacts has shown.

Data from the comparison site showed product availability in the buy-to-let market continued to improve for a fifth consecutive month in March.

The number of buy-to-let mortgages reached 2,333 at the start of the month, recovering to 81 per cent of their pre-pandemic level.

But while product availability has improved, the comparison site found the average two-year fixed rate, at 3.05 per cent, was 0.28 percentage points higher year-on-year.

The five-year equivalent, at 3.41 per cent, was also up 0.17 percentage points compared to a year ago and presented the highest rate since September 2019 (at 3.44 per cent). 

The only borrowing tier where rates had fallen month-on-month was at 60 per cent LTV, where both the two and five-year average fixed rates fell by 0.38 and 0.27 percentage points respectively.

Eleanor Williams, finance expert at Moneyfacts, said the impact of the pandemic on the buy-to-let sector had been “polarising”.

But she added: “It is important to note though that these are averages, and therefore while representative of the market as a whole, there are some very competitively priced products available, with some – depending on LTV and criteria – available at below 2 per cent.”

Corey Whelan, director at Cambridgeshire Money, said his firm had seen a lot more interest in buy-to-lets from landlords, a lot of which was being driven by the stamp duty holiday.

He commented: “To see a high amount of products I think is a reflection of the demand that is out there at the moment.”

Whelan added: “I would say however that the rates are not uncompetitive or likely to make an investor change their investment decisions.”

Buy-to-let mortgage market analysis

Product count - fixed and variable rates2,8972,1002,333
Two-year fixed - all LTVs2.77%2.97%3.05%
Two-year fixed - 80% LTV3.56%3.97%4.14%
Two-year fixed - 60% LTV1.89%2.52%2.14%
Five-year fixed - all LTVs3.24%3.32%3.41%
Five-year fixed - 80% LTV3.98%4.11%4.29%
Five-year fixed - 60% LTV2.31%2.79%2.52%
Data shown is as at first working day of month. Source:

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