Number of buy-to-let mortgages at 10-year high

The number of buy-to-let mortgages available has risen to its highest level in almost a decade, despite recent changes impacting the market, giving landlords who are meeting the challenges plenty of choice.

Post-crisis high

The figures, taken from the latest Moneyfacts UK Mortgage Trends Treasury Report, due to be published later this week, show that the number of buy-to-let (BTL) products has increased by 7% in just one month to total 1,725, up from 1,613 in August and the highest figure seen since December 2007, when 1,942 products were available.

The table below highlights how much the market has improved in the last year alone, despite dramatic changes to how landlords can claim tax relief that came into effect in April, and that's before yet more rules come into force at the end of this month.

Charlotte Nelson, finance expert at Moneyfacts, commented on the findings:

"The BTL market has had an understandably bumpy ride of late, considering all the regulation and tax changes it has had to contend with. Despite this, the market seems to be buoyant, with the number of available products reaching its highest point since the 1,942 products that were recorded in December 2007, almost a decade ago.

"The market has clearly recovered from the tougher affordability rules that were put in place on 1 January, when it saw a dramatic drop in the number of products available to landlords. Since then, the number of deals on offer has gone from strength to strength, culminating in a rise of 7% this month, the highest month-on-month growth Moneyfacts has seen in 2017."

Heightened competition

This all shows that the reduced BTL activity recorded at the start of the year – according to UK Finance – is now a dim and distant memory, as competition among lenders remains high, many of whom are fighting to retain their standing in a diminished market as landlords leave the sector. As a result, rates have also fallen, with the average two-year fixed BTL mortgage rate down from 2.91% in August to 2.86% in September, hitting another record low.

"This leaves borrowers looking for a buy-to-let mortgage today in a good position," said Charlotte. "Providers are now starting to get ready for further changes at the end of September, which will see lenders apply stricter standards to those with four or more properties. It is still uncertain how providers will choose to react to the new changes, but product numbers could climb as providers start to target their products to the two different types of borrower."

Take advantage of the market

However, there's no telling what the new regulation could do to the market. While it may lead to a wider product choice, rates may not necessarily improve further, as the extra pressure on the sector could be a turning point – the competition that is currently alive and well amongst providers could "start to ebb as they shift their focus to ensuring the new regulation is followed," said Charlotte, so now's the time to take advantage!

Competition remains intense, which means landlords have the ideal combination of record low BTL mortgage rates and the highest number of products available since the financial crisis took hold, so start comparing BTL mortgages to see the kind of options available before the new regulations come into force.