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BTL deals for first-time landlords on the rise

BTL deals for first-time landlords on the rise

Category: Buy To Let

Updated: 23/06/2015
First Published: 23/06/2015

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

There was once a time when the buy-to-let mortgage market was fairly limited for wannabe landlords, with more deals going to landlords who already had a presence in the sector. Well, Moneyfacts can reveal that the tide is turning, with the number of BTL deals for first-time landlords soaring.

The change has happened rapidly, too, and arguably, it's the pensions revolution that's fuelled the fire. Since the freedoms were introduced in April, the number of buy-to-let deals available to first-time landlords has risen by 13%, up from 574 in April to 664 today.

On a longer-term basis, this represents a 40% increase on the 396 deals available two years ago, proving that the buy-to-let market is flourishing for new and old borrowers alike, with the number of BTL deals available overall (874) hitting record levels.

"With the sector lying outside of the mmr, it is unsurprising that the number of buy-to-let deals has risen to an all-time high," said Charlotte Nelson, finance expert at Moneyfacts. And, given that 60,000 pensioners have already utilised the new freedoms – as announced by George Osborne last week – "it's highly likely that some of this money has been accessed with buy-to-let in mind", she added.

Really, it's no wonder that pensioners could be considering the BTL route. Savings rates are currently so poor that many will be looking at other avenues to fund their retirement, and happily, they've now got the options available. "Buy-to-let providers are seeking to capitalise on this new pool of cash and are now offering more deals than ever to first-time landlords", said Ms Nelson, and "with high rents and mortgage rates at record lows, the potential for big returns is high".

However, she cautions that this may not be the case forever: "With base rate likely to rise at some point in the future, it is essential for those thinking about a buy-to-let mortgage to secure one now while rates are low. But, it's also important to remember that buy-to-let is not without its risks, and anyone seeking to enter this sector would be wise to seek the advice of a financial adviser to see if this is the best route for them."

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