Money News

Holidays in the UK have soared in popularity as the pandemic has hobbled travellers. Luckily, the number of holiday let loan products has trebled since 2020, making it easier than ever to tap in to this demand.

Analysis from Moneyfacts.co.uk shows that there are now 231 buy-to-let mortgages eligible for holiday lets, a 25% increase in the number of available deals available since September 2021. Looking further back, in August 2020 there were just 74 similar deals available.

There are more lenders entering this part of the market too, with 27 brands - mainly building societies - offering holiday let loans. This is an increase from 25 in September 2021 and 21 in April 2021.  

The average cost of fixed-rate mortgage deals available on holiday lets is also becoming more competitive. In January 2022 you would pay an average rate of 3.92%, down from 4.14% in September 2021.

Lenders are backing the buy-to-let sector, with many more mortgage deals now available to landlords at higher loan-to-values, new research shows.

Moneyfacts.co.uk’s latest data reveals that the number of buy-to-let mortgage products has jumped by 222 month-on-month between December and January. This means there are now 3,528 mortgage deals for landlords to choose from, the highest number Moneyfacts has recorded since 2007. This also represents 945 more products than were available pre-pandemic.

Meanwhile there has been a sharp recovery in the number of products on offer to those borrowers with smaller deposits or levels of equity. This time last year, for example, there were no deals at all available in the 85% LTV bracket, but now there are 28 products available, the most since March 2020. As recently as November 2021, there were only four deals to choose from in this bracket.

A record number of buy-to-let companies were set up in 2021. Research published by residential estate agent and property services company Hamptons in its latest Monthly Lettings Index shows that a record 47,400 new buy-to-let companies were formed last year.

That’s a new total of 269,300 buy-to-let UK companies, many of which have set up since the withdrawal of mortgage interest relief for investors with properties in their personal names five years ago. This made it more profitable for some landlords to move buy-to-lets to a company. With half of all buy-to-let (BTL) mortgages taken up by companies, they hold nearly a third (583,000) of outstanding BTL mortgages.

Buying to rent can be an attractive option for many, particularly in areas where rents are rising. Hamptons says average monthly rents in southern England hit the plus-£1,000 mark for the first time at the end of 2021, as UK rents overall rose 7.2% year-on-year. Indeed, London and the South East are home to 45% of new BTL companies.

Despite this growth, 25,100 companies have closed since the pandemic began, according to Hamptons, more than 15,000 of them in 2021, and in some areas the number of companies is diminishing, such as the North East, where the number reduced by 6% last year.

This month, Ellie in our Events team had the enjoyable job of calling three of our readers to tell them they had won £1,000 each!

The three readers had all taken part in our Consumer Awards Survey, sharing their opinions on the financial services brands they use, which decide the winners of the Moneyfacts Consumer Awards 2022. This year, over 110,000 consumers (who voted) had their say on 140 brands!

Our first winner, who wished to remain anonymous, said “I never expected to win anything from doing the surveys, but they were so simple and easy to fill in - and often related to financial decisions I was either contemplating or had recently made - that it was a welcome diversion whenever they appeared”. He intends to use his winnings to pay his Christmas credit card bill to treat his wife and young daughter to a short break away or a special treat.

Gemma B, our second winner was delighted “This is the first time in my life I've had a genuine call saying I've won money, and the first time I've won more than £5 at anything! It was an amazing surprise because I'd completely forgotten about the survey. I was just beginning to plan how to budget for my daughters' upcoming school residential trips and now no scrimping and saving will be necessary - we feel tremendously lucky!”

Our final winner, who also wished to remain anonymous, plans to book a summer holiday somewhere hot!

The survey results will be unveiled at the Moneyfacts Consumer Awards, held on 31^st March at the Royal Lancaster Hotel in London.