The number of landlords buying properties to rent out is on the up, according to latest data from trade body UK Finance.
Landlords have had to face several challenges in recent years, including the gradual removal of tax relief and the introduction of a stamp duty surcharge on purchases of second homes. Despite these obstacles, the number of Buy to Let purchases has increased over the past three months, UK Finance figures show, with 5,300 purchases made in June, rising to 5,800 in July and 5,900 in August.
This is 3.3% fewer than in the same month a year earlier, with 6,100 Buy to Let purchases completed in August 2018. July’s figures, however, showed a 5.5% increase compared to the same month in 2018.
Buy to Let remortgage activity in August remained largely unchanged compared to the same month last year. There were 13,800 Buy to Let remortgages completed in August, 0.7% fewer than in the same month in 2018.
Landlords benefit from low rates and more choice
The Buy to Let mortgage market is becoming increasingly competitive as lenders battle to attract landlords. Leeds Building Society, for example, recently introduced the lowest two-year fixed rate for landlords with a 20% deposit to put down.
First-time landlords now have 1,474 Buy to Let mortgages to choose from, according to research by financial website Moneyfacts, an increase of nearly 300 compared to October last year.
Moneyfacts found that not only is there a much higher number of Buy to Let mortgage deals available, but average fixed rates for two and five-year Buy to Let mortgages are also lower than they were this time last year.
When the 2020-21 tax year begins next April, landlords will only be able to claim tax relief at the basic rate.
Remortgaging to a lower interest rate can reduce monthly outgoings and help to mitigate the impact of the tax relief changes, and with such a high level of competition in the Buy to Let mortgage market at the moment, now is an ideal time for landlords to review their options.
Low mortgage rates provide Buy to Let boost