Huge Buy-to-let growth

New figures revealed the average two-year fixed rate mortgage was lower now than compared to 2019.Meanwhile, the beginning of July saw the highest number of product options on offer in the buy-to-let space. The 2,709 deals on the market at the start of this month represented a 971 leap on this time last year when availability was limited following the product withdrawals which took place during the pandemic.

Landlords with 40% equity or deposit would find, even though their level of product choice was lower than this time last year, they were amongst those who might be able to secure a competitive new deal as the average two and five-year fixed rates in this bracket both remained 0.03% lower year-on-year.

There are also 365 deals more available now than were recorded in July 2019, demonstrating the strength and resilience of the sector in the aftermath of an unprecedented 18 months. The demand for buy-to-let could well remain strong in the months to come as rental demand is prevalent. Whether now is the right time to invest in property may also come down to the desire to earn a decent income.

Buy-to-let – to help your application run smoothly

Purchasing or re-mortgaging a buy to let mortgage offers a myriad of choice, understanding some key aspects of lender criteria can help keep you on the right track.

One route to getting into buy to let can be from a starting point of residential ownership.

If you change path and decide that, rather than sell, you would like to keep your former home and rent it out, it is important you conclude the selling journey before you make a buy to let application.

Lenders will not accept a buy-to-let application if a property is listed for sale.

If a property is discovered for sale post-valuation, you could stand to lose valuation fees if an application gets rejected as a result.

It is of course entirely sensible to establish what your options are in terms of a buy to let mortgage, before finalising a decision to take this route.

A mortgage broker will get the best deal for you.

A recent study asked portfolio buy-to-let landlords and brokers for their opinions about finding the best loan. The new research concludes that many buy-to-let landlords choose brokers for the best loan, as opposed to direct lenders.

When funding big investments, such as the purchase of a property, choosing the finance method is an important part of the process. A mortgage broker acts as a go-between who helps the consumer identify the most suitable lender, while a direct lender is a bank or other financial institution that decides whether the consumer qualifies for the loan.

Some 71% of investors with portfolios of between £2 million and £50 million stated that opting for a broker saved them money and provided them with a deal they were pleased with.

Rental growth is stable

Rental growth outside London has hit a four and a half-year high, according to Zoopla.

The property portal said that rents are rising fastest in the North East and the South West amid high levels of tenant demand and a shortage of homes to rent.

The average cost of renting a home in the UK outside London rose by 3% year-on-year to stand at £780 per month. And the average property took just 16 days to let.

In London rents are falling, down 9.4% compared with a year earlier. Average monthly rents are now at the same level they were in December 2013 – £1,554 a month.