Mortgage Opportunities Blossom for UK Property Investors

In a heartening development for property investors, the buy-to-let sector is experiencing a surge in product offerings while witnessing a decline in average fixed rates. The latest analysis from Moneyfactscompare reveals that month by month, the buy-to-let landscape is evolving positively.

The most notable improvement is the availability of buy-to-let products, which encompasses fixed and variable rates. The past few months have seen the market gain over 100 additional deals, bringing the total options to a robust 2,500. This remarkable surge is a promising signal of market recovery, especially when compared to the situation just a year ago when there were fewer than 1,000 product options.

Among the encouraging changes are the month-on-month reductions in average fixed rates. This positive shift applies to both two-year and five-year fixed-term rates. Landlords considering remortgaging at the end of their current deals will find the latest average rates around three per cent lower, reducing their financial burden.

Rachel Springall, Finance Expert at Moneyfactscompare, notes, “The buy-to-let market is witnessing a steady growth in product choices month by month, coupled with decreasing fixed rates over the same period. These are positive signs for landlords contemplating refinancing, especially those concerned about rate increases. However, it's important to be aware that landlords concluding their two- or five-year fixed rate deals will need to allocate more resources to accommodate higher mortgage payments."

"Borrowers with a 20 per cent deposit or equity will be pleased to find that average rates across two- and five-year fixed terms have dipped below seven per cent this month. Moreover, the niche market segment for landlords with a larger deposit or 25 per cent equity, who opt for a five-year fixed mortgage, now boasts the lowest average rates since June 2023. This segment also boasts a historic high in product choice, offering over 600 deals."

Despite the generally positive climate, some landlords may contemplate selling their properties due to concerns over profitability. Over the years, the buy-to-let sector has witnessed several challenges, including reducing mortgage rate tax relief, tax changes for CGT and holiday lets, and introducing new EPC requirements.

On a more optimistic note, new landlords entering the market have enticing opportunities, as newly let properties have achieved a remarkable 12 per cent rental growth across Great Britain, per Hamptons's study. This study also highlights a long-term decline in rental stock, which is expected to bolster future rental growth.

As the buy-to-let sector looks forward to a critical period, investors are encouraged to seek advice and keep rental expectations in check as costs continue to rise. The evolving mortgage landscape provides investors with promising prospects and the potential for a more profitable buy-to-let portfolio.

Intrigued by the shifting dynamics of the property market? Stay updated with the latest insights to make informed decisions about your investments.