"Landlords searching for a new buy-to-let mortgage may be pleased to see a rise in product availability, with the choice of deals soaring to its highest point on record"
- Rachel Springall - Moneyfactscompare
The number of available buy-to-let mortgage products has reached its highest level on record, with more than 4,000 deals now on offer, according to new data from Moneyfactscompare.co.uk.
The total number of fixed and variable rate buy-to-let products rose to 4,144 in June, the highest figure since Moneyfacts began tracking availability electronically in November 2011. The growth has been driven by an increase in five-year fixed deals, which now outnumber their two-year counterparts.
At the same time, average rates on fixed-term buy-to-let mortgages have continued to fall. June marks the fourth consecutive month of rate reductions across both two- and five-year fixed products. The average two-year fixed rate has now dropped below 5% for the first time since September 2022, while the average five-year fixed rate has reached its lowest point since October 2024.
“Landlords searching for a new buy-to-let mortgage may be pleased to see a rise in product availability, with the choice of deals soaring to its highest point on record,” said Rachel Springall, finance expert at Moneyfactscompare.co.uk. “Borrowers concerned about interest rates may also find it encouraging to see the average two-year fixed buy-to-let rate has fallen below 5% for the first time since September 2022 and both the two- and five-year fixed rates have fallen for the fourth consecutive month.”
She added, “The average five-year fixed buy-to-let rate is now at its lowest level in over six months, but year-on-year the rate has not dropped as viciously as its two-year counterpart. Lenders monitor swap rates to gauge future rate expectations, and when they drop, it encourages mortgage rate cuts. Lower buy-to-let rates might create a positive sentiment for new and existing landlords; however, there will be immense pressure on some to turn around a profit in the future.”
Springall also noted that changes in energy regulations could impact the sector. “Landlords must ensure their property has a minimum Energy Performance Certificate (EPC) rating of C, by 2030 at the latest, according to the government’s latest proposals,” she explained. “This is why a buy-to-let investment might not work for accidental landlords who are not able to fork out the costs to make renovations.”
Investors who operate at scale may see greater benefits, although they also face greater exposure to risk. “Investors typically expect to make better profits if investing in multiple properties, but by the same notion, it can open them to more risk if property prices plummet and they are locked into a mortgage or have no tenant for an extended period of time,” Springall said. “Finding the right location to enter the market is essential, so it’s wise to expand property searches across other areas in the country outside of the obvious major cities.”
Landlords approaching the end of low-rate deals are also weighing up how to maintain profitability. “Landlords coming off a low-rate fixed deal and needing to refinance will see increasing rents as the easiest way to boost margins,” Springall commented.
However, upcoming legislation could complicate that approach. “Landlords will also need to keep in mind the Renters' Right Bill, which is expected to come into force either later this year or in 2026,” she said. “The new laws include abolishing section 21 evictions and fixed-term tenancies, but also new rules on making rent increases. The legislation is designed to protect millions of renters, giving them more security, but understandably, this might be the final straw for existing landlords, leading to them exiting the sector.”
She concluded by highlighting the importance of preparation and advice for those entering the market. “Seeking advice before buying any property, such as the workings of setting up a limited company, is essential,” she said. “It is also vital for prospective investors to weigh up the costs involved in entering the buy-to-let market, such as the minimum 5% surcharge on Stamp Duty Land Tax (SDLT). An investment in property is more than aiming for a monthly profit; it’s important to understand the longer-term returns of selling the asset and the tax implications of selling up.”
