Average rates for products in the buy-to-let (BTL) sector are increasing, shows data from Moneyfacts.
The firm has issued a report showing that, on a monthly basis, the average rate for a two-year fix at all LTVs rose from 3.22% to 3.41%, while for a five-year fix at all LTVs, the average rate moved up from 3.42% to 3.56%.
However, at 85% LTV, the average rate for a two-year fix ticked up only slightly, by 1 basis point to 4.80%, and the average rate for a five-year fix in this category pushed up by 2 basis points, to 4.93%.
Moneyfacts also points out that product choice remains high: options dipped by only a small number on a monthly basis, from 3,435 to 3,374. And a year ago, in May 2021, Moneyfacts counted 2,302 products on the market.
“Interestingly,” Moneyfacts continues, in the 85% LTV range the number of deals available has dropped by, “only one deal fewer than the 80 recorded last month – which was the highest number recorded since May 2008 (104).”
Moneyfacts finance expert Eleanor Williams says this is positive news for landlords, but adds: “However, there are indications of an ongoing disparity in the limited supply of rental property available and the growing level of demand from tenants, with 93 new applicants registering per branch in March, compared to 78 in February, according the latest Propertymark Private Rented Sector report.”
She continues: “Rising interest rates and supply of property are not the only factors that may impact landlords in the months to come, as tax changes and the cost of living crisis may already be pinching the potential profitability of investing in property – although recent information from Hamptons suggested that the first quarter of 2022 was the ‘most active’ for landlords since 2016 when the stamp duty surcharge on the sale of second homes was introduced.”