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 rates||2,897||2,100||2,333|
|Two-year fixed - all LTVs||2.77%||2.97%||3.05%|
|Two-year fixed - 80% LTV||3.56%||3.97%||4.14%|
|Two-year fixed - 60% LTV||1.89%||2.52%||2.14%|
|Five-year fixed - all LTVs||3.24%||3.32%||3.41%|
|Five-year fixed - 80% LTV||3.98%||4.11%||4.29%|
|Five-year fixed - 60% LTV||2.31%||2.79%||2.52%|
|Data shown is as at first working day of month. Source: Moneyfacts.co.uk|
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