Landlord Confidence Reaches 5 Year High – Buy-to-let (BTL) investors continue to benefit from falls in mortgage rates

Buy-to-let (BTL) investors continue to benefit from falls in mortgage rates, and access to many more mortgage products. Could this be one of the reasons landlord confidence reaches a 5 year high?

A flurry of increased interest in buy to let as the choice of mortgage products for investors is now greater than at any time since 2007 according to independent finance service Moneyfacts.  September 2021 started with 2,968 products on offer in the BTL sector, the highest number seen by Moneyfacts since October 2007. There are currently 71 products more now than there were on offer pre-pandemic in March 2020 with 2 and 5 year fixed rate deals, some of the lowest we have seen in a year.

Eleanor Williams of Moneyfacts says: “As we pass the 25^th anniversary of the first BTL mortgages as we know them, our data gives landlords cause for positivity, as the number of products for them to choose from increased by 153, and at 2,968 is 1,162 higher than this time last year. 

“As rental demand remains high, BTL could be a worthwhile investment and the rise in overall product choice and fall in average rates is positive.”

Along with this good news for BTL mortgages, Paragon bank has also recently conducted independent research amongst 600 landlords with regards to their confidence in the sector. They asked these landlords to rate their expectations for rental yields, their own lettings business, capital gains, the private rental sector, and the UK financial market.

The proportion who deemed the outlook for these measures to be either ‘good’ or ‘very good’ exceeded levels seen in Q3 2016, the survey taken just before the Brexit vote, with investor optimism consistently rising following the record low levels seen in Q1 2020.

How Bank Rate affects your interest rates

If Bank Rate changes, then normally banks change their interest rates on saving and borrowing. But Bank Rate isn’t the only thing that affects interest rates on saving and borrowing.

Interest rates can change for other reasons and may not change by the same amount as the change in Bank Rate. To cover their costs, banks need to pay less on saving than they make on lending. But they can’t pay less than 0% on savings or people might not deposit any money with them. 

This means that when Bank Rate comes close to 0%, how far banks pass it on to lower saving and borrowing rates reduces. And as Bank Rate starts to rise away from close to 0%, that’s likely to lead to less of a rise in saving and borrowing rates.

With the Bank Rate at an all-time low there are many deals to be had on Buy-to-Let Mortgages on the market

We are the local property experts in Cornwall. If you need any type of property advice, contact us on 01326 331812 or email hello@llcoproperty.com, and we’ll be delighted to help.