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

“Landlords searching for a new deal will find the choice of buy-to-let mortgages has hit a record high, which could instil a sense of optimism. Views are mixed on how the buy-to-let market will fare this year, but lenders are clearly working hard to attract new business, such as those launching new deals at higher loan-to-value ratios, and even deals created for a limited company. Diving into the overall choice of buy-to-let mortgages shows there are still more deals with a fixed term of five years, versus two years, and both counts are at record highs. Five-year fixed buy-to-let mortgages have been in more abundance than their two-year counterparts since June 2020.

“Those landlords with a limited deposit or equity will find deals at 80% loan-to-value are at a record high. There are now 417 options, more than double the choice back in 2023, good news for those coming off a two-year fixed deal this year. However, the downside of the past few years has been volatile interest rates; thankfully, compared to 2023, buy-to-let mortgage rates are lower, across two- and five-year fixed terms. However, if someone locked into a cheap deal back in 2020, they will be in for a shock this year when they come to refinance. Landlords will hope rates come down this year, but sticky inflation can delay further base rate cuts, and the swap rate market remains unpredictable.

“Affordable housing remains in short supply, so demand for rental properties continues. However, rising costs are taking their toll on prospective landlords. A recent study by Hamptons estate agents showed the proportion of home purchases by landlords has fallen below double digits to 9.6% of house sales in January, a record low since records began in 2009. The margin of profit from rental income may well be tighter than in previous years, due to several factors, including the cull of mortgage tax relief and the expense to cover EPC requirements. Property is still regarded as a safe long-term investment, but both new and existing landlords would be wise to seek advice to assess the latest deals available to them and if it’s still viable to retain their portfolio.”