BTL market shows signs of stability after months of decline

The buy to let mortgage market appears to be stabilising after a period of significant product reduction, according to new data.

The research from Moneyfactscompare.co.uk found that while the increase is modest – just 39 deals – it follows a drop of 276 deals between the beginning of the year and February.

That was the biggest fall since June 2023.

Despite the positive trend, the total number of BTL products available remains below the peak at the start of 2024 (3,114).

There has been a rise in the number of five-year fixed deals – up 47 month-on-month – but this is offset by a drop in two-year options (down 19).

‘Stabilisation of buy to let product availability’

Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “The stabilisation of buy to let product availability is a positive turn of events for landlords after recent months of contracting choice.

“Lenders will no doubt need to remain fluid with their product ranges and ensure they can react quickly to market uncertainty, such as volatility surrounding swap rates.

“Deeper analysis of product choice shows that lenders are now offering more two- and five-year fixed deals year-on-year.

“However, month-on-month the choice of two-year fixed deals fell slightly, but five-year options rose.”

Landlords with a limited deposit or equity

The data also reveals that landlords with a limited deposit or equity will find a growing pool of products at 80% loan-to-value, with deals over two- and five-year fixed rising month-on-month – and up year-on-year.

There are issues over affordability where both the average two- and five-year fixed rates at 80% loan-to-value remain above 6%.

Ms Springall says that the overall average rates have managed to remain below 6% so far this year.

She said: “The potential returns from investing in buy to let may inspire borrowers to take the leap, but it is vital they seek advice to ensure it’s right for them.

“Indeed, the margin of profit from rental income may well be tighter than in previous years, due to several factors, including the cull of mortgage tax relief and the expense to cover EPC requirements.”

Together cuts rates on BTL loans

Property lender Together is making buy to let investments more affordable with substantial rate cuts across its products.

The reductions encompass first charge, second charge and consumer buy to let options with reductions of up to 2.05% for first charge fixed deals.

Those rates start at 6.95% for five years and 7.10% for two years.

Second charge options see five-year fixed rates from 7.5% and two-year fixes from 7.65%.

Variable rates start at 9.05% for first charge and 9.4% for second charge products.

MFS speeds up bridging and BTL mortgages

Meanwhile, Market Financial Solutions (MFS) says it is offering a faster turnaround on property loans by introducing title insurance across its residential bridging and buy to let (BTL) mortgage products.

Title insurance acts as a safety net, mitigating the need for extensive property searches and checks during the underwriting and conveyancing process. This allows MFS to streamline applications and deliver loans to clients quicker.

Initially, title insurance will be available for BTL remortgages and bridging loan refinances up to £1 million.

Paresh Raja, the lender’s chief executive, said: “Brokers and borrowers prioritise speed when dealing with specialist lenders.

“We constantly seek ways to responsibly expedite the loan approval process, and title insurance is a significant step forward.”

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