Booming buy-to-let market sees mortgage providers slash loan rates to new lows

16th November 2015


The combination of rising rents and high demand continues to drive the popularity of buy-to-let (BTL) as an investment option with lenders cutting loan rates to new lows in a bid to attract new borrowers.

Numbers from shows that average rates have fallen dramatically in recent years, while the number of deals that have no arrangement fee have more than doubled in just 12 months – and over five years the amount of these offers available has soared from 16 to 130.

Over the same period the group found that the average interest charged on a buy-to-let two-year fixed deal has fallen from 5.23% to 3.26% today. In addition, the typical five-year rate has dropped from 6.12% to 4.06%.

Charlotte Nelson, finance expert at, said: “The BTL market is clearly booming; with rents at a high and BTL mortgage rates dropping to historic lows, there is great potential for prospective landlords.

“The finding that the average two-year fixed rate has fallen by 0.37% in just one year is particularly good news for older borrowers who are looking to access their pension pots to invest in bricks and mortar.

“However, the Bank of England has recently gained new powers to regulate the buy-to-let market, which may mean that the end is nigh for these low-cost deals. Potential landlords looking for a fixed rate should therefore act fast to ensure they are not disappointed.”

Nelson also warned that future legislative changes to the market could also mean potential profits will fall, so investors need to keep an eye on any announcements to ensure BTL will still be profitable for them.

She added: “The increase in deals with no fee is a sign that BTL lenders are trying to diversify and offer borrowers more choice than ever before. However, borrowers still need to weigh up the true cost of a mortgage to ensure the best deal is secured.

“Anyone thinking about entering this sector would be wise to seek the advice of an independent financial adviser to see if BTL really is the best place for their investment.”

Nov-10 Nov-13 Nov-14 Today
Average Buy-to-Let Two-Year Fixed Rate 5.23% 4.07% 3.63% 3.26%
Average Buy-to-Let Five-Year Fixed Rate 6.12% 4.55% 4.33% 4.06%
Number of Buy-to-Let Deals Without a Fee 16 35 64 130
Source: Compiled: 16.11.15

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