Recent research from moneyfacts.co.uk shows that, despite the changes the buy-to-let (BTL) market has been facing, BTL mortgage competition has shown no signs of stopping.
Average rates are also continuing to fall, albeit at a slower pace. The research shows that the average two-year fixed BTL mortgage rate has fallen by 0.31% in the last year to stand at 2.91%. That said, the bulk of that reduction (0.30%) occurred between July 2016 and January of this year. Since then, the average has only fallen by just 0.01%, which coincided with tighter affordability rules and tax relief changes for BTL landlords. Nevertheless, there appears to be signs of growth, particularly in terms of availability of products.
New rules in January led to a dramatic reduction in product numbers with the figure falling to 1,408, but it’s now recovered to 1,610. However, further regulation in September could add additional pressure to the market. Pinpoint Finance would like to make as many BTL landlords and their professionals aware that from 30 September 2017, lenders will have to apply even stricter standards for landlords with four or more properties.
Over 1,400 BTL products currently on the market are available for borrowers with four or more properties in their portfolio, known as “Portfolio Landlords”. Therefore, these changes will affect a large chunk of the BTL mortgage market. As lenders adapt to these changes and portfolio landlords are asked for more financial information than ever before, competition between lenders, in the space could ease. With this uncertainty, any landlords looking for a BTL mortgage deal in the near future are likely to face a market with less competition.
Our advice would be to prepare and act now.
For more details on the pending changes, call Pinpoint Finance on 01904 866100