Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“It is encouraging to see buy-to-let product choice gradually recover from the shock surrounding the fiscal announcement. The choice of deals to landlords plummeted and both the average two and five-year fixed rates rose to 6% towards the tail end of 2022, but thankfully, both rates have slowly dipped below this level. There are now 2,400 deals for landlords to choose from, up from just 988 in October 2022, thanks to consecutive months of growth.

“The drop in average buy-to-let rates appear more subdued than seen within the residential mortgage sector, but lenders have made moves to entice new business despite some investors’ concerns surrounding rental income margins. As both the average two- and five-year fixed rates sit above 5%, compared to around 3% a year ago, it’s clear that landlords are likely to see their monthly repayments much higher than they perhaps anticipated. There may even be those looking to sell up this year because of the rise in interest rates, tax changes for holiday lets and CGT or even EPC requirements – all of which dampen profit margins or investment returns on sale of a property.

“Landlords may be waiting for fixed mortgage rates to come down further or indeed opt for a tracker mortgage to give them more flexibility to eventually switch their deal. However, interest rates are only part of the decision-making process when entering a buy-to-let investment. Whether that be for new or existing landlords, it is always wise to seek advice to ensure it is the right time to commit to a deal.”