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Number of first-time landlord products hits record high

A record number of first-time landlord mortgage products have been made available to borrowers as lenders launched extra loans to attract customers.

Moneyfacts.co.uk has recorded a 13% rise in the number of deals to first-time landlords since the start of this year, as competition for new business intensifies among lenders fighting for new loans.

Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said: “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.”

The latest research from Moneyfacts also shows that lenders have been launching cheaper rates in recent weeks, particularly for longer-term deals.

“Not only do first-time landlords have more choice, but they have also seen rates fall by 0.36% over the same period,” Nelson added.

Despite uncertainty in the market, mortgage providers are not shying away from offering this risky group deals.

Nelson continued: “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.

“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.

“Of course, BTL is not without its risks, and anyone seeking to enter this sector would be wise to seek the advice of a financial adviser to see if this is the best route for them.”

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