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
| Mar-20 | Feb-21 | Mar-21 | |
| 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 | |||
chloe.cheung@ft.com
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