Buy-to-let mortgages on the increase

The number of buy-to-let mortgages available has reached a two-and-a-half year high as lenders return to the market, figures showed.
By The Newsroom
Published 14th May 2011, 01:00 BST

Investment landlords have 463 different deals to choose from, up from 312 six months ago and just 299 in May last year, with availability now at its highest level since October 2008, according to financial information group Moneyfacts.co.uk.

The rise in choice has been driven by lenders returning to the market, with 64 banks and building societies offering buy-to-let deals, up from just 48 a year ago.

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The increase in competition has helped to drive down the average cost of the loans, with typical interest rates falling from 5.30 per cent last year to 4.97 per cent now.

The buy-to-let mortgage market was hit hard by the credit crunch, with many lenders withdrawing from the sector completely as they struggled to raise funds to lend.

Demand for rental accommodation is very high, as the combination of falling house prices, economic uncertainty and the problems in the mortgage market have led many potential buyers to put their plans on hold and opt to rent a property instead.

But the shortage of mortgage finance has meant that many investors have struggled to increase their portfolios to meet this trend.