Buy-To-Let mortgage market picks up

  • Sep 2nd 2020

The buy-to-let market is showing vital signs of recovery after the number of deals halved during the first few weeks of the coronavirus pandemic.

According to Moneyfacts, there are a total number of 1,660 buy-to-let mortgage products available in the market, in comparison to May, when there were 1,455 mortgage deals available for landlords. Although this is considerably lower than the 2,897 mortgage products available at the beginning of March, lenders are starting to re-evaluate the market due to the unexpected demand post lockdown.

Lenders are also tempting landlords with attractive interest rates, where the average cost for a two-year and five-year buy-to-let mortgages are standing at 2.72% and 3.11% respectively. These mortgage rates are much lower than the ones advertised before the lockdown in March.

The reason for this change, is because the buy-to-let sector has been more resilient in comparison with the residential mortgage sector, due to investors looking out for opportunities during the last six months.

Although lenders were pulling deals from the market prior to the lockdown, since May, there has been an upward trend in available mortgage products, creating a competitive market as lenders are keen to do business.

With the stamp duty holiday announcement and an increase in competitive mortgage deals in the buy-to-let sector, it certainly is a great time to be investing in property. With the government raising the stamp duty threshold from £125,000 to £500,000 in all property purchases until March 2021, this has encouraged investors to look for new property investments. Investors will still have to pay the 3% stamp duty surcharge, however, they won’t be paying standard stamp duty on properties below £500,000.

Eleanor Williams, finance expert at Moneyfacts, said: “Landlords looking to invest in the buy-to-let sector could see this as an opportune time to explore their options, especially if they think that average rates may continue the upward trajectory we have witnessed over the last two months.”

This rise in activity is good news for those who want to rent a home, as there is currently a significant mismatch between supply and demand, which is forcing rents higher.

If you are looking to add to your existing property portfolio, or are a budding property investor still to take their first step, speak with our property experts today on 0116 266 9977, who will guide you on how best to invest in property.