A finance company chief executive claims recent dips in buy to let mortgage rates has “revitalised the nation’s landlords.”

An analysis by Jonathan Samuels, boss of Octane Capital, claims that: 

• In December 2021, when interest rates first started to climb, the average buy-to-let mortgage, at an average rate of 1.70%,  required a monthly interest only repayment of £286 – climbing to £827 for a full monthly repayment;

• Fast forward to September 2023 and following 14 consecutive rate increases which saw the base rate climb to 5.25%, the average landlord faced a far higher monthly mortgage repayment;

• The average buy-to-let mortgage rate climbed to 5.99% and, as a result, the full monthly mortgage repayment had increased to £1,382 per month, an increase of 67%. What’s more, those opting to make an interest only repayment saw the monthly cost of a mortgage increase by 274% to £1,071 per month.

• However, since September 2023, a hold on the base rate has helped to bring greater certainty to the mortgage sector and, with the addition of a first rate cut in four years coming in August, buy-to-let borrowing affordability has increased;

• The latest figures (August 2024) show that the average rate of a buy-to-let mortgage has fallen to 4.33%, which in turn has seen the average full monthly repayment bill by 12% to £1,212 per month, whilst the average monthly cost of an interest only payment has fallen by 25% to £801;

• The latest figures show that during the second quarter of this year, the average portfolio size of a buy-to-let landlord increased from 7.2 to 7.6 properties.

• Across the East Midlands, the average portfolio size increased by 2.5 properties between Q1 and Q2, with increases also seen across Wales (+1.9), the North West (+1.0), the East of England (+0.5) and the South East (+0.5).