The availability of buy-to-let mortgages has remained relatively high during the pandemic, giving landlords cause for optimism, according to Moneyfacts.
Figures from the data provider showed there were 1,976 buy-to-let products available in mid-January, fewer than before the pandemic began but more than the 1,455 available in May.
The provider also suggested lender confidence as the number of deals available in the 80 per cent LTV tier has risen by 26 since December.
Average rates have also increased, with two- and five-year fixed rates standing at 2.92 per cent and 3.29 per cent respectively for all LTV brackets, the highest levels recorded by the provider since November 2019.
But Eleanor Williams, finance expert at Moneyfacts, warned the market has been “volatile” since the start of this year.
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She said: “Lenders have been adjusting their offerings and consequently availability continues to fluctuate – there are now 27 fewer mortgage products on offer than there were just a couple of weeks ago, and so those considering exploring a new BTL mortgage could do well to secure the knowledge and advice of a qualified adviser, to ensure they keep abreast of any relevant changes.”
Buy-to-let mortgage market analysis
| PRODUCT NUMBERS | Jan-20 | Mar-20 | May-20 | Dec-20 | Jan-21 | 15.1.21 |
| BTL product count – fixed and variable rates | 2,583 | 2,897 | 1,455 | 1,818 | 2,003 | 1,976 |
| All 80% LTV BTL products – fixed and variable rates | 297 | 368 | 19 | 74 | 100 | 100 |
| AVERAGE RATES | Jan-20 | Mar-20 | May-20 | Dec-20 | Jan-21 | 15.1.21 |
| BTL two-year fixed – all LTVs | 2.82% | 2.77% | 2.51% | 2.89% | 2.89% | 2.92% |
| BTL five-year fixed – all LTVs | 3.19% | 3.24% | 2.94% | 3.25% | 3.27% | 3.29% |
The Intermediary Mortgage Lenders Association has meanwhile highlighted the opportunity for remortgage business from landlords who took out five-year deals before the stamp duty surcharge was introduced in 2016.
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The trade association predicted the five-year anniversary of the surcharge would enable demand in the mortgage market to stay strong this year despite the end of the stamp duty holiday.
A survey by Paragon Bank also found that half of buy-to-let brokers said they would focus on five-year remortgage business when the stamp duty holiday ends.
But Kevin Dunn, director at Furnley House, commented that he expected demand to fall.
Mr Dunn said: “Whilst demand has remained strong in this area over the last six months, I expect demand in buy-to-let mortgages to decrease once the stamp duty holiday ends at the end of March, however not quite in the same way it fell off a cliff when the stamp duty surcharge was announced at the beginning of 2016.”
By Chloe Cheung
Source: FT Adviser
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