BTL product choice surpasses pre-pandemic total

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Eleanor Williams, Press Officer
Eleanor Williams, Press Officer / Finance Expert T: 01603 476205 E: Email Eleanor
27/09/2021

BTL product choice surpasses pre-pandemic total

Buy-to-let (BTL) product availability has eclipsed the choice on offer in March 2020, before the impact of the pandemic was felt across the sector, according to the latest data from Moneyfacts.co.uk.

 

  • September started with 2,968 products on offer in the BTL sector, the highest number seen on our records since October 2007 (3,305). This is 71 products more than there were on offer pre-pandemic in March 2020 (2,897).
  • The average overall two- and five-year fixed BTL rates have reduced this month by 0.03% and 0.04% respectively. At 2.94% the two-year fixed average is the lowest it has been since January (2.89%), and at 3.25% the five-year fixed equivalent is the lowest since December 2020 (3.25%).
  • At the top end of the BTL loan-to-value sector (LTV) there is a slightly different story for landlords with smaller deposits or amounts of equity. At 85% LTV, availability remained unchanged at just 19 products this month, 13 less than were available in September 2019. The average two- and five-year fixed rates in this bracket of 5.61% and 5.83% are 0.88% and 0.44% higher than what was on offer two years ago.

BTL product choice surpasses pre-pandemic total

Buy-to-let (BTL) product availability has eclipsed the choice on offer in March 2020, before the impact of the pandemic was felt across the sector, according to the latest data from Moneyfacts.co.uk.

 

  • September started with 2,968 products on offer in the BTL sector, the highest number seen on our records since October 2007 (3,305). This is 71 products more than there were on offer pre-pandemic in March 2020 (2,897).
  • The average overall two- and five-year fixed BTL rates have reduced this month by 0.03% and 0.04% respectively. At 2.94% the two-year fixed average is the lowest it has been since January (2.89%), and at 3.25% the five-year fixed equivalent is the lowest since December 2020 (3.25%).
  • At the top end of the BTL loan-to-value sector (LTV) there is a slightly different story for landlords with smaller deposits or amounts of equity. At 85% LTV, availability remained unchanged at just 19 products this month, 13 less than were available in September 2019. The average two- and five-year fixed rates in this bracket of 5.61% and 5.83% are 0.88% and 0.44% higher than what was on offer two years ago.

Buy-to-let market analysis

Product numbers

Sep-19

Mar-20

Sep-20

Aug-21

Sep-21

BTL product count - fixed and variable rates

2,424

2,897

1,806

2,815

2,968

All 85% LTV BTL products - fixed and variable rates

32

32

16

19

19

Average rates

Sep-19

Mar-20

Sep-20

Aug-21

Sep-21

BTL two-year fixed - all LTVs

2.97%

2.77%

2.84%

2.97%

2.94%

BTL two-year fixed - 85% LTV

4.73%

4.70%

5.47%

5.61%

5.61%

BTL five-year fixed - all LTVs

3.44%

3.24%

3.20%

3.29%

3.25%

BTL five-year fixed - 85% LTV

5.39%

5.34%

5.64%

5.83%

5.83%

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

Buy-to-let market analysis

Product numbers

Sep-19

Mar-20

Sep-20

Aug-21

Sep-21

BTL product count - fixed and variable rates

2,424

2,897

1,806

2,815

2,968

All 85% LTV BTL products - fixed and variable rates

32

32

16

19

19

Average rates

Sep-19

Mar-20

Sep-20

Aug-21

Sep-21

BTL two-year fixed - all LTVs

2.97%

2.77%

2.84%

2.97%

2.94%

BTL two-year fixed - 85% LTV

4.73%

4.70%

5.47%

5.61%

5.61%

BTL five-year fixed - all LTVs

3.44%

3.24%

3.20%

3.29%

3.25%

BTL five-year fixed - 85% LTV

5.39%

5.34%

5.64%

5.83%

5.83%

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

Eleanor Williams, Finance Expert at Moneyfacts.co.uk, said:

“As we pass the 25th anniversary of the first BTL mortgages as we know them, our data gives landlords cause for positivity, as the number of products for them to choose from has risen by 153 this month, and at 2,968 is 1,162 higher than this time last year (1,806 Sep 2020). The resilience of this sector in the aftermath of a challenging 18-months is clear as choice now exceeds the number of deals available before the pandemic in March 2020 by 71 options.

“Further cause for celebration is that the interest charged on BTL mortgages is falling, with the average overall two- and five-year fixed rates dropping by 0.03% and 0.04% this month, to 2.94% and 3.25% respectively. Compared to a year ago, on face value borrowers will notice average rates are higher today. However, the rates a year ago were driven by the impact of the pandemic and product availability was low – particularly in the higher LTV tiers where rates are generally higher due to pricing for risk. As it stands, compared to a pre-pandemic September 2019, both the average two- and five-year fixed BTL rates are lower by 0.03% and 0.19% respectively, indicating rate pricing competition for those looking for new finance for an investment property. 

“As rental demand remains high, BTL could be a worthwhile investment and the rise in overall product choice and fall in average rates is positive. However, a note of caution as lenders’ enthusiasm to improve ranges seems to dissipate at the top end of the BTL LTV spectrum. The maximum 85% LTV bracket has not only seen availability stall at 19 deals, but also the average two- and five-year fixed rates on offer for landlords with just 15% equity or deposit are a quite staggering 0.88% and 0.44% above their September 2019 equivalents, indicating that while lenders are competing for business, this eagerness does not seem to extend to the riskier end of the market yet.”

Eleanor Williams, Finance Expert at Moneyfacts.co.uk, said:

“As we pass the 25th anniversary of the first BTL mortgages as we know them, our data gives landlords cause for positivity, as the number of products for them to choose from has risen by 153 this month, and at 2,968 is 1,162 higher than this time last year (1,806 Sep 2020). The resilience of this sector in the aftermath of a challenging 18-months is clear as choice now exceeds the number of deals available before the pandemic in March 2020 by 71 options.

“Further cause for celebration is that the interest charged on BTL mortgages is falling, with the average overall two- and five-year fixed rates dropping by 0.03% and 0.04% this month, to 2.94% and 3.25% respectively. Compared to a year ago, on face value borrowers will notice average rates are higher today. However, the rates a year ago were driven by the impact of the pandemic and product availability was low – particularly in the higher LTV tiers where rates are generally higher due to pricing for risk. As it stands, compared to a pre-pandemic September 2019, both the average two- and five-year fixed BTL rates are lower by 0.03% and 0.19% respectively, indicating rate pricing competition for those looking for new finance for an investment property. 

“As rental demand remains high, BTL could be a worthwhile investment and the rise in overall product choice and fall in average rates is positive. However, a note of caution as lenders’ enthusiasm to improve ranges seems to dissipate at the top end of the BTL LTV spectrum. The maximum 85% LTV bracket has not only seen availability stall at 19 deals, but also the average two- and five-year fixed rates on offer for landlords with just 15% equity or deposit are a quite staggering 0.88% and 0.44% above their September 2019 equivalents, indicating that while lenders are competing for business, this eagerness does not seem to extend to the riskier end of the market yet.”

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts.co.uk is a financial product price comparison site, launched in 2000, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, there is no commercial influence on the way Moneyfacts.co.uk ranks products, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfacts.co.uk if you decide to source this information.

For more information about us please see our key facts.

 

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts.co.uk is a financial product price comparison site, launched in 2000, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, there is no commercial influence on the way Moneyfacts.co.uk ranks products, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfacts.co.uk if you decide to source this information.

For more information about us please see our key facts.

 

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Rachel Springall Press Officer / Finance Expert
Eleanor Williams Press Officer / Finance Expert