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

“The buy-to-let sector has faced its share of upheaval and changes to regulations and requirements in recent years, so it is highly encouraging to see that providers are still keen to attract first-time landlords (FTLs). Information from the Rightmove Rental Trends Tracker indicates that rents have risen at the fastest rate on record, while tenant demand has almost doubled. Perhaps understandably, some consumers may therefore be considering investing in bricks and mortar, especially while the returns available on standard savings accounts continue to fail to beat the rate of inflation.

“Our data shows that there are currently 2,235 products on offer to FTLs, up from 1,311 deals this time last year. Echoing the recovery of the wider BTL sector, where product availability has returned to levels in excess of those seen pre-pandemic, would-be new landlords may be pleased to note that, at 64%, the proportion of the market catering to their demographic has remained relatively stable year-on-year. In fact, provision for FTLs currently remains 3% above that recorded in February 2020 (61%), indicating that lenders remain committed to supporting prospective landlords.

“FTLs concerned about potential future rate rises may wish to consider locking into the mid-term stability that a five-year fixed rate product provides. There has been a 0.16% year-on-year rate drop experienced by the overall average five-year fixed rate for all landlord types, which may be encouraging news, and the equivalent rate for FTLs has fallen by 0.19% over the same time period to 3.47%. However, those who might prefer the shorter commitment of a two-year fixed rate could be disappointed to see that at 3.19% there has been a 0.09% increase in the average two-year fixed rate for FTLs since February 2021, even though the equivalent overall average rate has fallen by 0.07% year-on-year.

“While providers seem to be working hard to cater deals for prospective landlords, those deciding whether this is the right time for them to join the BTL arena might be wise to secure the support of a qualified adviser in assessing their choices and to ensure they are informed regarding upcoming changes to the market and associated risks. Careful planning and seeking independent advice could be vital in establishing whether BTL is a viable investment opportunity for them.”