The popularity of buy-to-let as an investment option continues to soar thanks to high rents and increasing demand, according to data analyst Moneyfacts.

Lenders are subsequently taking advantage of surging demand and are doing all they can to attract new buy-to-let borrowers.

Data from Moneyfacts shows that lenders are pulling out all the stops to entice new customers; average rates have fallen dramatically while the number of deals that have no arrangement fee have more than doubled in just one year. 

Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “The BTL market is clearly booming; with rents at a high and BTL mortgage rates dropping to historic lows, there is great potential for prospective landlords.

“The finding that the average two-year fixed rate has fallen by 0.37% in just one year is particularly good news for older borrowers who are looking to access their pension pots to invest in bricks and mortar.

“However, the Bank of England has recently gained new powers to regulate the buy-to-let market, which may mean that the end is nigh for these low-cost deals. Potential landlords looking for a fixed rate should therefore act fast to ensure they are not disappointed.

“Future legislative changes to the BTL market could also mean potential profits will fall, so investors need to keep an eye on any announcements to ensure BTL will still be profitable for them.

“The increase in deals with no fee is a sign that BTL lenders are trying to diversify and offer borrowers more choice than ever before. However, borrowers still need to weigh up the true cost of a mortgage to ensure the best deal is secured. Anyone thinking about entering this sector would be wise to seek the advice of an independent financial adviser to see if BTL really is the best place for their investment.”