The number of buy-to-let products at 80 per cent LTV available on the market increased at the start of this year.
In December 2020, Moneyfacts data shows, there were 74 BTL products at this higher LTV point to choose from. By January this had risen to 100.
This is some way off the 297 products available in January 2020 but rising product numbers within the Covid pandemic indicates lender confidence, Moneyfacts says.
In total there are now 1,976 BTL products on the market, a slight tip from the 2,003 counted at the start of January 2021 but an improvement on the 1,818 seen in December 2020.
Meanwhile, the average two-year BTL fixed rate across all LTVs rose from 2.89 per cent in December 2020 to 2.92 per cent as of 15 January 2021 and the average five-year fixed rate across all BTLs from 3.25 per cent to 3.29 per cent.
“Both the two and five-year average fixed rates for all are 0.10 per cent above their January 2020 equivalents,” says Moneyfacts finance expert Eleanor Williams.
She adds: “When looked at as individual tiers, it is surprising to see that the 60 per cent LTV two- and five-year average fixed rates (2.55 per cent and 2.84 per cent) have seen some of the largest increases when compared to January 2020, now 0.63 per cent and 0.52 per cent higher, respectively.
“The rise in these rates occurred significantly between March and April 2020 (increasing by 0.35 per cent and 0.31 per cent respectively month-on-month), which was as availability was contracting at its quickest, and could therefore partially be due to lenders mitigating risk as borrower demand was focused on these options while availability in the higher LTV tiers was limited. Furthermore, with ongoing economic concern, it may be that lenders have increased their provisions for defaults with rate increases at tiers that previously were more competitive.”
Williams continues: “Recent research from Hamptons suggests that prospective tenant numbers in December 2020 outstripped 2019 levels, while the number of available rental homes dropped everywhere outside of London, driving a rise in rental growth that has recently outpaced house price growth. This seems to confirm that there is cause for optimism and that despite the knocks of recent years, the BTL sector has a vital place in our economic recovery.”
