25 Apr 2024

Buy-to-let sees signs of recovery

The buy-to-let sector has been one of the biggest casualties of the last two years, with 93% of all deals disappearing in that time.

Landlords unable to find more than a 20% deposit can no longer find a new deal, despite deals requiring just a 10% or 15% deposit making up 64.8% of the market just over two years ago.

Only four deals from Clydesdale and Yorkshire Bank remain for landlords with a 20% deposit. If landlords want a choice of deals then at least a 25% deposit is needed.

Date	Number of BTL Products available
August 2007 (Peak)	3,662
2 Years Ago	1,942
One Year Ago	308
September 2009 (Low)	179
Today	239
Source: Moneyfacts.co.uk 16.11.09

Max LTV	% of total deals August 2007	% of total deals today
90%	12.8%	0.0%
85%	52.0%	0.0%
80%	12.8%	1.4%
75%	12.6%	24.2%
70%	2.8%	21.4%
65%	5.1%	15.3%
60%	1.2%	30.6%
50%	0.7%	7.1%
Source: Moneyfacts.co.uk 16.11.09

	August 2007	2 Years Ago	1 Year Ago	Today
Average 2 year fixed	6.28%	6.44%	7.20%	5.71%
Average 2 year tracker	6.35%	6.66%	N/A	4.47%
Tracker margin above base rate	0.60%	0.91%	N/A	3.97%
Source: Moneyfacts.co.uk 16.11.09

Michelle Slade, spokesperson for Moneyfacts.co.uk commented:

“Numerous BTL lenders have pulled out of the sector, while many of the remaining lenders restricting the number of deals on offer, making it harder than ever for landlords to find a competitive mortgage.

“The number of deals available is a long way off the peak seen in August 2007, although in the last few months the sector has seen positive signs with the number of deals available increasing from the all time low of 179 in September 09 to 239 available today.

“Many landlords’ biggest problem in securing a competitive deal will be finding the deposit needed as previous house price falls are likely to have eaten into the equity available in their portfolio.

“At least a 25% deposit is needed, but in the residential market a 40% deposit is needed to secure a good deal.

“Despite a 5.25% drop in base rate between August 2007 and today’ the average fixed rate mortgage has only reduced by 0.57%, while the average tracker has only fallen 1.88%.

“BTL lenders have continued to tighten criteria, restricting the size of portfolios that landlords can have, both in number of properties and maximum total advance.”

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

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