Prospective landlords or those with a buy-to-let (BTL) mortgage set to mature this year may be interested to see our latest data, which highlights sustained levels of product availability in the sector, but warns that interest rates are rising.
There was a small month-on-month dip in the number of products available to landlords, reducing by 61 to leave 3,374 deals on offer at the start of May. Compared to this time last year though, there are over 1,000 more BTL products available now (May 2021 – 2,302), and availability remains notably above that recorded pre-pandemic (March 2020 – 2,897).
Rising for a third consecutive month to 3.41%, the average overall two-year fixed BTL rate is at the highest level recorded since September 2015 (3.41%). This is 0.51% above where this rate stood at the start of December 2021 (2.90%), prior to any of the four recent base rate increases.
Meanwhile, the average overall five-year fixed rate has also increased for a third month in row and sits at 3.56%. This is the highest since March 2019 (3.58%) and represents a rise of 0.38% compared to December 2021 (3.18%). Landlords with a maturing five-year fixed rate from 2017 may therefore be able to secure a more competitive deal as this rate remains 0.12% lower than where it sat in May 2017 (3.68%).
Interestingly, for what is traditionally viewed as a higher-risk area of the sector, landlords will find the level of choice at 85% loan-to-value (LTV) of 79 products is only one deal fewer than the 80 recorded last month – which was the highest number recorded since May 2008 (104). Also, the average two- and five-year fixed rates for landlords with 15% deposits or equity are the only LTV bracket where rates are lower now (4.80% and 4.93%) than they were at the start of December 2021 (5.17% and 5.22%).