Prospective landlords in luck as buy to let mortgage deals return

The buy to let market is showing signs of recovery, with growing numbers of lenders re-starting their mortgages for landlords.

OnTheMarket takes a look at the current state of play in the buy to let mortgage market.

HSBC and Barclays bring back buy to let mortgages

HSBC confirmed earlier this month that it had cleared the valuations backlog that had built up before lockdown rules were eased and has begun to offer buy to let mortgages again.

The bank said that requests for physical valuations are now able to work to the pre-lockdown timetable which should see them completed within four days of a mortgage application being received.

Barclays similarly has introduced new buy to let mortgages and reduced some of its buy to let rates too.

There is certainly plenty of appetite for buy to let mortgages, with some lenders swamped by demand. Ipswich Building Society, for example, reported a 40 per cent increase in buy to let applications in the seven days up to 18 June compared to the previous week.

It has had to withdraw its five-year fixed rate buy to let mortgages so that it can process the applications it has already received, though it continues to offer two year fixed rate buy to let deals.

Mixed picture for buy to let mortgage rates

Overall, there are 280 more buy to let mortgage deals available now than there were at the start of June, according to data published in the Moneyfacts UK Mortgage Trends Treasury Report.

There are now 46 more two-year fixed rate buy to let mortgage products available for landlords looking to borrow 75 per cent of the property value and 54 more five-year fixed rate deals.

The research shows that average rates on both two and five-year fixed rate buy to let deals have increased slightly since the beginning of May, by 0.08 and 0.09 of a percentage point respectively, to 2.59 per cent and 3.03 per cent.

However, rates for landlords wanting to borrow 80 per cent of the property value have fallen, with two-year fixed rates reducing by 0.49 and 0.67 of a percentage point respectively, to 3.12 per cent and 3.65 per cent.

Tough times for savers but opportunities for would-be landlords

Eleanor Williams, finance expert at, said: “The Bank of England base rate currently remains at its lowest ever level of 0.10 per cent, resulting in further despair for savers.

“However, those looking to invest their money in property now that the mortgage market has reopened may feel now is a good time to explore their options, particularly with rates becoming more competitive and product choice beginning to return this month.

“As we begin to see indications that the buy to let market may be starting to recover, the full economic impact of the current crisis is still not yet clear for tenants and landlords alike.

“However, those who are in a position to consider capitalising on possible falls in house prices to expand their property portfolios, or indeed those looking to switch their current deal, may wish to move quickly.”

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