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Range of buy-to-let mortgages leaps to new record

The number of home loans being marketed to landlords has reached a new high, research has revealed.

The latest Complex Buy to Let Index from specialist broker Mortgages for Business has found that the number of BTL products has leapt by 11% over the past three months to hit a record high of 953.

The firm said this represented a year-on-year increase of 35%: at this point in 2014, there were just 707 different landlord mortgages to choose from.

However, Mortgages for Business also found that the yields on standard “vanilla” buy-to-let properties had dropped by 0.8 percentage points over the last quarter. Meanwhile, yields on HMOs (houses in multiple occupation) fell by just 0.1 percentage points over the same period.

David Whittaker, managing director of Mortgages for Business, said: “The number of new mortgages coming onto the market has rocketed in recent months. There is huge interest in mortgages suitable for limited companies as landlords take advice from their accountants.

“However, as rents fail to keep pace with racing property prices, yields are continuing to plateau. Returns on vanilla buy to let have now fallen to the 5% mark. Landlords with reasonable borrowing costs and a strong portfolio of these sorts of properties will still be making a solid income from such investments – but this changes the case for those considering new purchases.”

Whittaker added: “With average yields on HMOs still nearer 10%, more complex property types are likely to attract a growing portion of new investment.”

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