Investment Properties Out of Vogue? Buy-to-Let Mortgage Deals Hit a Record High

Published On: July 7, 2018Categories: Property1.6 min read

Slowing price growth in many parts of the country and landlord tax breaks being slashed has apparently put the brakes on the market for investment properties. The lenders obviously haven’t gotten the memo though with The Telegraph today reporting that the number of buy-to-let mortgage deals available has hit a record high. So if you are able to uncover investment properties the prospective returns on which look to stack up, there is plenty of competition between lenders to give you a mortgage.

Research carried out by Moneyfacts put number of specialist buy-to-let mortgage products currently on the market at 1268 at the beginning of this month, up 13% since the start of the year. A year ago there were over 230 less landlord-targeted mortgage products.

The jump in buy-to-let mortgages of course doesn’t necessarily mean that more investment properties are being bought. But it does suggest that the lending market is making an effort to adapt to a new environment. A new wave of buy-to-let mortgage products are being designed to help landlords compensate for the fact that by 2020 they will no longer be able to deduct mortgage interest from their taxable income. They charge a higher upfront fee, often require a bigger deposit, but then significantly reduce to ongoing interest rate charged.

Perhaps more than providing options for new buy-to-let landlords, the surge in specialist mortgage products will benefit those who already have investment properties. The Telegraph suggests significant numbers of landlords are approaching the end of their present deals. This means they will be looking for new mortgage arrangements, ideally adapted to changes in market conditions. Lenders appear to be positioning themselves to compete for this impending wave of renewals and provider transfers.

Moneyfacts’ Charlotte Nelson explains:

“Despite market uncertainty, providers are certainly not shying away from offering deals to this risky group. Lenders know all too well that many borrowers on their mortgage books will be coming to the end of their term and reassessing their deal, so they need to attract new business”.

Good news for landlords more recently used to having to absorb less positive market developments!

About the Author: Jonathan Adams

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