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Buy-to-let fixed rates drop and product choice rises

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
09/10/2023

Buy-to-let fixed rates drop and product choice rises

The buy-to-let sector has seen fixed rates fall and product choice grow month-on-month, according to the latest analysis by Moneyfactscompare.co.uk.

Buy-to-let fixed rates drop and product choice rises

The buy-to-let sector has seen fixed rates fall and product choice grow month-on-month, according to the latest analysis by Moneyfactscompare.co.uk.

  • Overall buy-to-let product availability (fixed and variable) has improved month-on-month by just over 100 deals. There are now over 2,500 options available, which is an encouraging sign of recovery. A year ago, there were less than 1,000 options.
  • Average fixed rates have fallen month-on-month, both over a two-year or five-year fixed term. Landlords coming off a five- or two-year fixed rate deal and looking to remortgage will find the latest average rates are around 3% higher.

 

  • Overall buy-to-let product availability (fixed and variable) has improved month-on-month by just over 100 deals. There are now over 2,500 options available, which is an encouraging sign of recovery. A year ago, there were less than 1,000 options.
  • Average fixed rates have fallen month-on-month, both over a two-year or five-year fixed term. Landlords coming off a five- or two-year fixed rate deal and looking to remortgage will find the latest average rates are around 3% higher.

 

Buy-to-let market analysis

Product numbers

Oct-18

Oct-21

Oct-22

Sep-23

Oct-23

BTL product count (fixed and variable)

2,010

3,097

988

2,475

2,581

Two-year fixed rate BTL all LTVs

649

990

183

700

773

Two-year fixed rate BTL at 60% LTVs

91

109

35

72

67

Two-year fixed rate BTL at 75% LTVs

270

408

84

347

379

Two-year fixed rate BTL at 80% LTVs

68

111

28

74

97

Five-year fixed rate BTL all LTVs

696

1,155

375

1,110

1,136

Five-year fixed rate BTL at 60% LTVs

95

116

36

83

81

Five-year fixed rate BTL at 75% LTVs

298

505

197

592

613

Five-year fixed rate BTL at 80% LTVs

75

133

52

80

85

Average rates

Oct-18

Oct-21

Oct-22

Sep-23

Oct-23

Two-year fixed rate BTL all LTVs

2.90%

2.92%

5.57%

6.64%

6.40%

Two-year fixed rate BTL at 60% LTV

2.09%

1.97%

4.52%

6.48%

6.09%

Two-year fixed rate BTL at 75% LTV

2.99%

2.98%

5.41%

6.64%

6.40%

Two-year fixed rate BTL at 80% LTVs

3.74%

3.92%

6.74%

7.30%

6.95%

Five-year fixed rate BTL all LTVs

3.40%

3.18%

6.05%

6.49%

6.32%

Five-year fixed rate BTL at 60% LTV

2.61%

2.33%

4.26%

5.95%

5.70%

Five-year fixed rate BTL at 75% LTV

3.52%

3.25%

6.04%

6.57%

6.36%

Five-year fixed rate BTL at 80% LTV

4.20%

4.12%

7.10%

7.09%

6.84%

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

 

Buy-to-let market analysis

Product numbers

Oct-18

Oct-21

Oct-22

Sep-23

Oct-23

BTL product count (fixed and variable)

2,010

3,097

988

2,475

2,581

Two-year fixed rate BTL all LTVs

649

990

183

700

773

Two-year fixed rate BTL at 60% LTVs

91

109

35

72

67

Two-year fixed rate BTL at 75% LTVs

270

408

84

347

379

Two-year fixed rate BTL at 80% LTVs

68

111

28

74

97

Five-year fixed rate BTL all LTVs

696

1,155

375

1,110

1,136

Five-year fixed rate BTL at 60% LTVs

95

116

36

83

81

Five-year fixed rate BTL at 75% LTVs

298

505

197

592

613

Five-year fixed rate BTL at 80% LTVs

75

133

52

80

85

Average rates

Oct-18

Oct-21

Oct-22

Sep-23

Oct-23

Two-year fixed rate BTL all LTVs

2.90%

2.92%

5.57%

6.64%

6.40%

Two-year fixed rate BTL at 60% LTV

2.09%

1.97%

4.52%

6.48%

6.09%

Two-year fixed rate BTL at 75% LTV

2.99%

2.98%

5.41%

6.64%

6.40%

Two-year fixed rate BTL at 80% LTVs

3.74%

3.92%

6.74%

7.30%

6.95%

Five-year fixed rate BTL all LTVs

3.40%

3.18%

6.05%

6.49%

6.32%

Five-year fixed rate BTL at 60% LTV

2.61%

2.33%

4.26%

5.95%

5.70%

Five-year fixed rate BTL at 75% LTV

3.52%

3.25%

6.04%

6.57%

6.36%

Five-year fixed rate BTL at 80% LTV

4.20%

4.12%

7.10%

7.09%

6.84%

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

 

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

“The buy-to-let market has seen a healthy growth in product choice month-on-month and fixed rates have fallen over the same period. These are encouraging signs for landlords looking to refinance who may have been concerned about rates escalating. However, those coming off a two- or five-year fixed rate deal will need to find more funds to afford higher mortgage repayments. The average buy-to-let rate on a two-year fixed mortgage in October 2021 was 2.92%; it has now more than doubled to 6.40% while the average rate on a five-year equivalent in October 2018 was 3.40%, and now stands at 6.32%.

“Borrowers with just a 20% deposit or equity will find average rates across two- and five-year fixed terms have dropped below 7% this month and choice in this niche area of the market has grown. Landlords who have a larger deposit or equity of 25%, and are prepared to lock into a five-year fixed mortgage, will find the average rate at 75% loan-to-value stands at its lowest point since June 2023 (5.85%). Product choice for a five-year fixed deal at 75% LTV stands at its highest point on record, with over 600 deals to choose from.

“Despite such positivity, some landlords may seriously be considering selling up, as the profitability of a buy-to-let portfolio may not be enough to cover costs. Over the years, landlords’ profit margins have been hit by a cull in mortgage rate tax relief, tax changes for CGT and holiday lets, plus new EPC requirements. The enticement to invest for new landlords is prevalent, as rental growth on a newly let property hit 12% across Great Britain, according to a study by Hamptons, which also cited the long-term decline in rental stock will continue to underpin future rental growth. The months ahead for the buy-to-let sector are crucial, so any investor would be wise to seek advice before they commit and be conscious of any rental expectations amid rising costs. Providers will need to carefully balance supporting their existing customers and work hard to entice new business to encourage an optimistic outlook for investors in the months ahead.”

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

“The buy-to-let market has seen a healthy growth in product choice month-on-month and fixed rates have fallen over the same period. These are encouraging signs for landlords looking to refinance who may have been concerned about rates escalating. However, those coming off a two- or five-year fixed rate deal will need to find more funds to afford higher mortgage repayments. The average buy-to-let rate on a two-year fixed mortgage in October 2021 was 2.92%; it has now more than doubled to 6.40% while the average rate on a five-year equivalent in October 2018 was 3.40%, and now stands at 6.32%.

“Borrowers with just a 20% deposit or equity will find average rates across two- and five-year fixed terms have dropped below 7% this month and choice in this niche area of the market has grown. Landlords who have a larger deposit or equity of 25%, and are prepared to lock into a five-year fixed mortgage, will find the average rate at 75% loan-to-value stands at its lowest point since June 2023 (5.85%). Product choice for a five-year fixed deal at 75% LTV stands at its highest point on record, with over 600 deals to choose from.

“Despite such positivity, some landlords may seriously be considering selling up, as the profitability of a buy-to-let portfolio may not be enough to cover costs. Over the years, landlords’ profit margins have been hit by a cull in mortgage rate tax relief, tax changes for CGT and holiday lets, plus new EPC requirements. The enticement to invest for new landlords is prevalent, as rental growth on a newly let property hit 12% across Great Britain, according to a study by Hamptons, which also cited the long-term decline in rental stock will continue to underpin future rental growth. The months ahead for the buy-to-let sector are crucial, so any investor would be wise to seek advice before they commit and be conscious of any rental expectations amid rising costs. Providers will need to carefully balance supporting their existing customers and work hard to entice new business to encourage an optimistic outlook for investors in the months ahead.”

Notes to editors

Pioneering financial comparison technology for over 35 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.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, 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 Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

Pioneering financial comparison technology for over 35 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.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, 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 Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Contact Us If you're looking for extra comment, a chart or more information, then please give us a call. We are always more than happy to help.
Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Apprentice Press & PR Assistant