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The number of buy to let products available to first time landlords has risen to record levels, according to research from Moneyfacts.
Since the beginning of the year, the number of buy to let products available to first time landlords has risen by 13 per cent. The number of such products on the market in July stood at 1,268 in comparison to the 1,123 recorded in January. Further growth was shown in comparison to July 2017, where just 1,034 products were recorded. 929 were available in July 2016.
The average rate for a two-year fix for first-time landlords currently stands at 2.83 per cent. This marks a decline from 2.84 per cent in January and 3.19 per cent in July 2016.
Moneyfacts finance expert Charlotte Nelson commented: ‘It is great news that first time landlords have more choice than ever before, increasing by a whopping 339 BTL products in just two years. Not only do first time landlords have more choice, but they have also seen rates fall by 0.36 per cent over the same period. Despite market uncertainty, providers are certainly not shying away from offering this risky group deals. Providers 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. As such, they’re enhancing their ranges and offering these extra deals to entice those customers who are new to the market, thereby breathing new life into their mortgage book.’
She continued: ‘While multiple regulations and tax changes may have put some borrowers off becoming a landlord, it seems many are undeterred. In fact, it has been reported that Accord has seen the number of applications from aspiring landlords double over the past 12 months. This is little surprise when many consider bricks and mortar as a safe bet. With savings rates low, many are looking to get better returns elsewhere. Also, while rents are high and mortgage rates for first time landlords are still falling, the potential for a decent return is high. Potential investors should not get ahead of themselves however. Since September 2017, they face checks and questions about their finances and will need to do their homework to ensure they get the best deal.’