First-time landlord opportunity rising: Money facts

The proportion of mortgage products on the market aimed at first-time landlords has grown over the last 12 months, shows data from Moneyfacts.

This has occurred while overall availability has shrunk. In February 2020, there were 1,635 products for first-time landlords – 61 per cent of the market, while this year there are 1,311, making up 65 per cent of the market.

“Would-be investors have plenty of choice, and [this] is also an indication that providers are committed to servicing this demographic of borrowers,” says Moneyfacts finance expert Eleanor Williams.

However, average rates for this type of borrower have grown. In February 2020, the average two-year fixed rate for a first-time landlord was 2.80 per cent. This has since increased to 3.10 per cent.

The average five-year fixed rate for first-time landlords, meanwhile, has risen from 3.31 per cent to 3.66 per cent within the same time frame.

“These increases are more significant than those seen in the overall buy-to-let average rates, where the equivalent averages for all landlord types rose by 0.22 per cent and 0.12 per cent, respectively,” say Williams.

She adds: “The BTL sector as a whole has shown itself to be relatively resilient and robust in the face of an unprecedented year, and therefore there may now be those who are considering capitalising on the opportunity to invest in the sector for the first time.”

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